OFT rules on beer price rigging complaint
THE Office of Fair Trading today ruled that the UK’s pub sector is competitive and it has found no evidence of price rigging by the leading pub operators.
The ruling follows a complaint from the Campaign for Real Ale (CAMRA) that the so-called “beer tie”, which requires pub lessees to purchase beer solely through their pub-owning company landlord, was anti-competitive.
The OFT concluded the pub sector was competitive overall and it there was no evidence of competition problems having an adverse impact on consumers.
The OFT first responded to the complaint in October 2009 but decided to consult on the findings of an appeal by CAMRA to the Competition Appeal Tribunal, which is still ongoing.
Following the consultation, the OFT said it had concluded that consumers benefited from considerable competition and choice between pubs and that this competition prevented the beer tie from being used to inflate pub beer prices beyond competitive levels.
The OFT also concluded 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.”
The ruling will be a boost to the UK’s pub operators many of which, such as Punch Taverns, Enterprise Inns, Marston’s and M&B are based in the West Midlands.
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