Pubco probe 'will urge OFT review'

A senior pubco figure says it's a "racing certainty" the Parliamentary inquiry into pub companies will recommend the Office of Fair Trading re-examines the beer tie.

It comes as the Business & Enterprise Committee has stepped up its investigations, including contacting 1,000 tenants directly and meeting pubco regional managers.

The inquiry has returned to the spotlight after two Government ministers urged the industry to examine the tie during the high-profile pub crisis summit in Parliament.

Some observers attribute this week's abrupt departure of British Beer & Pub Association boss Rob Hayward to their comments, which angered trade chiefs who wanted to focus on things like tax and legislation.

The senior trade source said: "We know where the Bec inquiry will go. It will recommend another OFT review of the tie. It's a racing certainty."

The OFT has previously maintained the tie does not contravene competition law.

"It will get them [MPs] off the hook," said the source.

"It'll look as though they are doing something, but it will take years to go through and I'm not of the view that the tie will change."

Bec chairman Peter Luff declined to be drawn on the issue. "I don't know what it's going to recommend yet," he said.

A Bec spokeswoman said 1,000 tenants and lessees of pubcos and brewers were contacted, in proportion of the size of each tenanted estate, as part of the inquiry.

They were asked 25 questions in phone interviews. "There were questions about how business was, were they having difficulties and what were the causes. This morning [Monday] the chairman and [committee member] Adrian Bailey met with Enterprise regional managers. Other committee members are meeting divisional directors [of pubcos] to understand how the process works."

Luff also visited Enterprise's Eagle Ale House in Battersea, London, to discuss Brulines with licensee Simon Clark, who gave evidence against pubcos in a Bec hearing. Luff told the MA: "We've concluded the evidence gathering."

At the All-Party Parliamentary Beer Group's crisis summit, licensing minister Gerry Sutcliffe said: "There are measures that Government can take, certainly, but there is action the industry can take. The issue around the tie needs to be looked at."

He pointed to previous competition inquiries about the tie and said: "Perhaps we need to look at that again."

Treasury minister Angela Eagle, who recently met members of the anti-pubco Fair Pint campaign, said: "There are issues about the pub ownership structure that impact on some of this [the issues affecting pubs].

"Those business models do have an impact."

The Bec spokeswoman said the inquiry report is due around Easter, which falls on 12 April.

On Tuesday BBPA director of brewing David Long was was appointed as the group's interim chief executive.