UK prime minister Gordon Brown said he will refer the government's investigation into pubco power to the Office of Fair Trading (OFT), if there is strong enough evidence, according to reports.

Last month the UK House of Commons Business and Enterprise Committee called on the Competition Commission to consider a reform of the "tied" arrangement that binds many of the UK's pubs.

Around 24,000 pubs operated under the "tie" contracts also known as "wet rent", whereby pub tenants are obliged to buy their beer supplies from their landlords.

However, the Prime Minister, speaking at the National GMB conference in Blackpool yesterday (16 June), said if the evidence was strong enough, it would be referred to the OFT. 

His remarks came in response to question from the floor, according to a report by trade publication The Publican, which attended the conference.

Giles Thorley, Punch Taverns CEO, said its company has "taken comfort" from the fact that the authorities have investigated pub tie arrangements several times and concluded that they are not anti-competitive where they incorporate a policy of "multi-sourcing and periodic tendering", as it's company does.

"The OFT's written evidence to BESC noted that it had received no evidence or complaints that led it to alter its previous position (when responding to the TISC in 2004) that there is no significant competition problem in relation to the beer and pub market. The company believes that, should the Government (or the OFT) decide to refer the matter to the CC on this occasion, the outcome will not lead to a prohibition of the beer tie."