Pub 2610 p05 news 22/10/09 13:20 Page 5
thePublican Monday 26/10/09 5
News This Week
The Office of Fair Trading will take no action over the beer tie as there is “no
evidence” it is harming consumers. Matt Eley takes a closer look at its
response to CAMRA’s super complaint
OFT –‘TIED DEALS DO
NOT PREVENT CHOICE’
WHEN CAMRA used its status as Options open to the Office of
a ‘super complainant’ in July it Fair Trading (OFT) included
raised a number of concerns about carrying out a market study or
the beer tie. referring the matter to the
The consumer group claimed Competition Commission.
high rents and beer prices are Instead, however, it has decided
forcing tied pubs out of business to take no further action, stating
and resulting in higher prices for that “further investigation of
people at the bar. competition problems within the
beer and pub market is not
warranted”.
CAMRA claimed big pubcos
Wholesale prices for tied licensees
can use the tie to charge
OFT overall assessment
excessive wholesale prices,
“We consider that in a competitive
ultimately ha
ving an impact on market, any strategy by a pub
choice and price for customer
s
company which compromises the
The OFT said: “
At a national, competitive position of its lessees
regional and local le
vel, there is would not be sustainable, as this
no significant concentration of
would be expected to result in sales
pubs owned b
y an individual and margin losses for the lessee and,
pub compan
y and there is
in turn, for the pub company. To that
generally competition betw
een
extent, pub companies’ commercial The OFT said it believes that the tie does not prevent pubs
a number of different operator
s.
interests would appear to be aligned offering a wide choice to consumers
“We ha
ve found no
with the interests of their lessees.
evidence… pub companies are
“Further we do not consider
acting jointly to increase prices
that tied lease agreements prevent Tied lease and small brewers their pub company and the assess-
or rents for lessees.
pubs offering a wide choice to CAMRA claimed that the tie ment of rents are either matters for
“We ha
ve found marginal
consumers. Generally, large pub prevents many pubs selling beer pub companies to address with indi-
differences in the a
verage price companies source from a number from small brewers vidual lessees or are issues for the
for lager in tied pubs compared
of suppliers.” “We have not found that tied lease industry and other relevant bodies to
to freehouses (w
e estimate that agreements operated by large pub consider… and not issues for the
average retail prices for a pint
companies are foreclosing brewers OFT.”
of lager are eight pence higher CAMRA argued the
T
seeking to secure access for the
in tied pubs,
three pence higher
bundling of prices for echnical services
supply of beer to retail outlets, or Restrictive covenants
for a pint of cider and at the beer and technical
prevent pubs having a wide choice of CAMRA argued that imposing
same le
vel for standard bitter).
services resulted in
drinks for consumers. restrictive covenants – where
“Competition does not tak
e
ineffective competition for
“Small brewers appear to face pubs can only be bought if they
place only on price. Customer
s look
the pro
vision of such ser
vices
significant scale and logistical diffi- are run as anything but a pub –
for a package of features when “The evidence does not
culties in accessing wholesale and harms competition.
choosing a pub,
which include the
indicate that this issue
distribution markets. We do not “Responses indicate the use of
‘amenity
, food offering
, value/prices
rier
represents a significant bar
consider that these difficulties result restrictive covenants is not wide-
and choice of drinks offered.
”
to entr
y or expansion for small
from the operation of the tied lease spread and…pub companies have
brew
ers,”
said the OFT
. agreements. stated they do not intend to impose
“Sales to the on-trade through a restrictive covenants in future pub
delivery scheme established by the sales.
Society of Independent Brewers “Our response on this issue does
indicate there are market-led not preclude further action by the
solutions.” OFT… if such practices become
widespread.”
Rent assessment
CAMRA raised concerns about the
methods and transparency of the
Give us your views at
‘profits valuation’ approach
www.thepublican.com
“Individual lessees concerns regard-
ing the conduct of negotiations with
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