OFT Stands By Beer Tie Findings
News: October 2010
The Office of Fair Trading has concluded its review of the impact of the beer tie on the UK pub market by recommending no further action against pub companies.
In October 2009, the OFT issued findings of an investigation into the tied beer market, in response to a ‘super complaint’ lodged by consumer organisation CAMRA.
The findings declared that ‘it had found no evidence that beer supply ties were resulting in competition problems that were having an adverse impact on consumers,’ and that it would therefore be taking no further action.
CAMRA responded by registering an appeal with the Competition Appeal Tribunal, but the appeal was put on hold while the OFT agreed to look again at the issue, taking in new evidence.
Now the OFT has confirmed its earlier findings, stating that it has discovered that ‘the pub sector in the UK is competitive overall’ and that ‘it has not found evidence of competition problems that are having a significant adverse impact on consumers’.
CAMRA has vowed to continue the fight, however, accusing the OFT of basing its decision on ‘a blinkered and selective consideration of the evidence’.
‘The OFT’s own analysis recognises that tied pub landlords on average pay around £20,000 more for their beer every year as a result of being tied and unable to purchase beer on the open market,’ said CAMRA Chief Executive Mike Benner.
‘CAMRA, unlike the OFT, recognises that higher costs imposed upon tied pub landlords will inevitably be passed onto consumers through higher prices, under investment and pub closures.’