Office of Fair Trading clears pubs in beer ties row

Oct 15 2010 by Henryk Zientek, Huddersfield Daily Examiner

PUB operators have been again cleared by competition watchdogs after a reopened probe into the controversial “beer ties”.

The Office of Fair Trading has stuck by its initial findings last October that there was no evidence that so-called tied prices – where pub companies force tenants to buy drinks from them – damage competition.

Companies with scores of pubs across the Huddersfield area are among those operating beer ties.

The OFT revisited the inquiry after an appeal from the Campaign for Real Ale, which lodged the original “super-complaint” in July, 2009, over fears that high rents and beer ties were forcing good landlords out of business and leading to higher prices for consumers.

But the OFT said the UK pub sector is “competitive overall” and that there were “insufficient grounds to justify further OFT action.”

A spokesman for the Federation of Licensed Victuallers in West Yorkshire, said his organisation was “fairly relaxed” about the OFT decision.

He said: “The beer tie is not the problem, but it needs to be modified to provide a fairer division of profit between the pub company and the tenant.”

He said removing the tie would only encourage pubs to reach financial arrangements with specific breweries to exclude competitors’ beers and would not result in more choice for customers.

The OFT said it recognised pub lessee concerns over contractual issues with their pub companies.