Pubcos to defend anti-competitive claims

Pubcos could be forced to clearly show that their tied lease agreements are not anti competitive.

The Government has backed the banning of restrictive covenants that prevent pubs being operated as pubs when they are sold, saying that they are anti-competitive, according to a consultation published yesterday.

As revealed by the Morning Advertiser​ earlier this week, secondary legislation the Land Agreements Exclusion and Revocation Order of 2004, could be easily amended by Government so that use of restrictive covenants on pubs would no longer be lawful.

The Government's preferred option is to repeal the Order entirely and the consultation states that this would be "appropriate since it would remove an anomaly from the competition regime, plugging an unnecessary gap in the way the prohibition on anti-competitive agreements applies".

Jonathan Mail, director of policy and public affairs at the Campaign for Real Ale, said: "The Government has sensibly taken the initial view that there is no valid basis for continuing to exclude land agreements, such as the beer tie, from provisions of competition law prohibiting anti-competitive agreements.

"Revocation of the Land Agreements Exclusion Order is likely to mean an end to restrictive covenants being used to prevent closed pubs reopening and will put pressure on pub owning companies to clearly show that their beer tie agreements are not anti-competitive.

"We hope this will lead to reform which will improve the position of tied pub businesses and therefore the consumer."

He said the announcement will make it easier for the UK Competition Authorities to consider Camra's super-complaint which expresses concern at "consumer detriment caused by the excessive pub rents and high beer prices charged to many tied pub businesses".

The consultation will close on 4 November and a response form is available by clicking here​.