CAMRA attacks "unfair" beer tie prices in OFT complaint

The Office of Fair Trading (OFT) will investigate the beer tie after CAMRA today lodged a "super complaint" about the issue, attacking high rents and beer prices charged by the pubcos.

The OFT must give an initial response to the complaint within 90 days.

As expected, CAMRA has used its status as a "super complainant" with the OFT to force an investigation.

CAMRA's 'super-complaint', 'A Fair Share for the Consumer', suggests that high rents and 'tied' beer prices are driving many good pub licensees out of business and contributing to the "destruction of Britain's pubs through pub closures and chronic under investment in pub facilities".

However CAMRA is against the beer tie being totally abolished - and instead is calling for "fairer" agreements.

Mike Benner, CAMRA's chief executive, said: "Exploitation of 'beer tie' agreements and the unfair method of setting pub rents are harming consumers and society as a whole.

"It is enshrined in EU law that consumers must get a fair share of the benefits arising from exclusive purchasing deals such as the 'beer tie', but this is often not the case.

"We hope that the OFT will act to deliver a fair share for Britain's 14 million regular pub goers. Reform of the 'beer tie' along with a framework of support from government is urgently required to save the pub from extinction."

Benner said the beer tie model works best when it is a "true partnership", but, he added: "Unfortuantely this is not the current reality".

"Pub-owning companies are able to earn excessive profits by increasing the cost of beer to their 'tied' pub landlords who have no choice but to accept high prices and pass them onto the consumer.

"This practice has led to higher prices in pubs and has widened the gap between pub and supermarket prices encouraging people to shun the pub for their armchair."

On the rent system, Benner said an "independent and affordable" rent dispute system was "urgently needed" to "avoid pub landlords being forced into agreeing excessive rents because they cannot afford to contest it".

He added: "The current system is seriously flawed and is leading to higher prices in pubs and contributing to the high rate of pub closures."

CAMRA also wants a "guest beer" law so that tied licensees can buy a guest ale from a brewer of their choice.

It also wants a law banning companies from placing a restricitve covenant on a pub being sold, which stops it from being used as a pub in future.

The trade is currently going through a mediation process over the pubco model and CAMRA has said the OFT could use this process to make the outcome of the mediation legally binding.

However, Benner added: "Total abolition of the 'beer tie' would be a grave error and would be likely to turn the current storm of pub closures into a hurricane and lead to increased domination of the beer market by global brewers.

"Abolishing the 'tie' would be the classic example of 'chucking the baby out with the bath water.

"In response to the BEC report, some companies have taken some positive steps to improve matters and we welcome that progress, but legally-binding reform is still required to ensure a fair deal for consumers."