Camra: Government must overrule OFT

The Campaign for Real Ale (CAMRA) says the Government must overrule the Office of Fair Trading's (OFT) decision to take no further action on the beer tie.

CAMRA, which forced the OFT to look again at the tie through its "super-complaint", wants Business Secretary Lord Mandelson to refer the "unfair" tie to the Competition Commission.

In its report today, the OFT said consumers are not disadvantaged by the presence of the tie.

But Mike Benner, CAMRA's chief executive, said: "We do not accept that there is sufficient competition between pubs or adequate consumer benefit from competition and choice within this sector.

"The OFT decision fails to address the legitimate concerns raised both in our super-complaint and the BEC report and does nothing to address the imbalance in the landlord/ lessee partnership which is leading to higher prices, less choice and weak investment in pubs.

"It is difficult to see how the OFT can argue that competition is working well in the pubs sector when demand is falling, yet prices are rising.

"Urgent action is now required by Government to stem the flow of pub closures, build a sustainable future and ensure that consumers get a fair share of the benefit from tied agreements as demanded by competition law.

"There simply cannot be effective competition between all pubs when many pub landlords are placed at a huge disadvantage, by paying wholesale beer prices that can be around 50p a pint greater than their free of tie competitors."

The OFT found higher prices exist for some products in tied pubs, but said these are marginal, with a pint of lager costing drinkers 8p more in a tied pub compared to a free house.

CAMRA, however, said this "fails to fully consider that higher prices in tied pubs lead to artificially higher prices in other local pubs through lack of effective price competition". It also said "today's cash-strapped drinkers would not regard an 8p premium as marginal".

CAMRA also called on the Government to take "immediate legislative steps to protect pub landlords and therefore consumers from unfair and anti-competitive contract terms".

CAMRA has called for a "policy framework" to support community pubs that benefit society following the publication of 'Pubs and Places' by the Institute for Public Policy Research in March.