UK: Office of Fair Trading rejects beer-tie probe
OFT says beer-tie does not harm consumers
Pub companies in the UK have welcomed the Office of Fair Trading's decision to reject calls for a full inquiry into the country's beer-tie system.
Its ruling is a blow to anti-tie groups, lead by the Campaign for Real Ale (CAMRA), who argue that the beer-tie forces up prices for consumers by putting tied pub tenants at a competitive disadvantage.
Around 24,000 pubs are 'tied' to pub companies such as Punch Taverns and Enterprise Inns in the UK, meaning that they must purchase the majority of their beer from the company.
The Office of Fair Trading (OFT) ruled today (14 October) that the setup does not harm competition in the sector. "CAMRA's super-complaint has provided a timely opportunity to examine the pub sector, as the beer-tie model has attracted considerable attention recently," said the competition watchdog's senior director of goods, Ann Pope.
"After carrying out detailed analysis, we have found that the sector is competitive overall and that there is no need for the OFT to take further action at the moment."
The British Beer & Pub Association (BBPA) welcomed the decision. "We would hope this would help draw a line under many issues and enable the industry to move forward," said BBPA chief executive, Brigid Simmonds.
The BBPA has helped to spearhead a new industry code of practice that has been designed to make the beer-tie fairer. "A key focus for us is on ensuring the process of Code implementation and tie reform remains on track and keeping Government and all MPs regularly informed of the positive progress being made," said Simmonds.
The Coalition Government has said that it will consider action against the pub trade if the new code of practice is not implemented properly. Meanwhile, CAMRA has an appeal pending against the OFT's ruling.
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