OFT: no further action on pubcos
The Office of Fair Trading (OFT) will take no further action on the beer tie and the pubco model after finding no evidence of competition problems that are having an adverse significant adverse impact on consumers.
It is the OFT's second report following the Campaign for Real Ale's (CAMRA's) super-complaint that anti-competitive practices are inflating pub beer prices by around 50p a pint, restricting consumer choice and leading to chronic underinvestment in the nation's pubs.
"The OFT has concluded that the pub sector in the UK is competitive overall and it has not found evidence of competition problems that are having a significant adverse impact on consumers," it said.
"It has therefore concluded that there are insufficient grounds to justify further OFT action."
The OFT first responded to the super-complaint in October 2009 but decided to consult on the findings contained in that response following an appeal by CAMRA to the Competition Appeal Tribunal, which is ongoing.
"Following this work, the OFT has concluded that consumers benefit from considerable competition and choice between pubs and that this competition prevents the beer tie from being used to inflate pub beer prices beyond competitive levels.
"The OFT also concluded that the beer tie has not prevented tied pubs from offering a wide choice of beers to consumers, having found that pub-owning companies generally source beer from a considerable range of suppliers, including smaller brewers."
Ann Pope, OFT senior director of goods, said: "The OFT appreciates how important local pubs are to many consumers and local communities. CAMRA's super-complaint has provided a timely opportunity to examine the pub sector, as the beer tie model has attracted considerable attention recently.
"After carrying out detailed analysis, we have found that the sector is competitive overall and that there is no need for the OFT to take further action at the moment.
"The OFT recognises that many pub lessees are concerned about issues regarding the contractual relationship with their pub-company and we note that the pub industry is taking steps to address some of these concerns. Our focus, however, has been to assess whether the market is working well for consumers."
Blinkered
Speaking to the Morning Advertiser, Benner said: "It is a disappointing response and we feel it is has taken a blinkered look at a selection of evidence.
"The OFT recognises the concerns of tied lessees but fails to recognise the impact that has on consumers and that is extraordinary."
Anti-beer tie campaign group Fair Pint has urged the Campaign for Real Ale (CAMRA) to forge ahead with its original appeal.
"What CAMRA must do now is press ahead with their original appeal to the tribunal and get the preliminary report looked at," said founding member Steve Corbett.
Lib Dem MP and Save the Pub Group chair Greg Mulholland said: "Once again the Office of Fair Trading have failed to do their job over the issues surrounding the beer tie. Disappointing but not surprising."
Time to move on
But Marston's Pub Company boss Alistair Darby said it was now time to move on and for CAMRA to get back to what it is good at — promoting the virtues of cask ale.
"We are happy this chapter is drawing to a close so that we can concentrate on the reforms we promised to make and prove to MPs we are making real progress," he said.
"It seems to me the OFT has indicated that it feels there is no need for a full market investigation and that is very helpful in removing another piece of uncertainty.
"It is time to move on and focus on meeting the commitments we have made before the next pivotal date (June 2011) to show MPs we have changed."
More on the OFT report
• Download the OFT's final decision regarding CAMRA's super-complaint
• Fair Pint: CAMRA must press ahead with appeal
• Darby: time for CAMRA to move on
• BBPA: OFT report draws a line under issue
What do you think of the OFT's final report? Is it fair or is it blinkered? Let us know your views by clicking Post a comment below
