On 22 October 2009, the OFT published its response to the Campaign for Real Ale ("CAMRA") super-complaint (the "super-complaint") relating to the supply of beer in pubs. The issues raised in the super-complaint related to the operation of exclusive purchasing obligations by pub-owning companies ("pub companies") which require their tenants to purchase beer and other drinks solely through the pub company (the "beer tie"). CAMRA's super-complaint argued that these beer ties led to a lessening of competition between pub companies and led to higher prices and less choice for consumers. The super-complaint also raised issues relating to the method according to which rents are calculated by pub companies.
The OFT, in its assessment, found that at the national, regional and local level, there was evidence to indicate that there was significant competition between pub outlets owned by different pub companies. In light of this, the OFT was of the opinion that any strategy of a pub company that undermines the competitive position of the tenant would not be sustainable and would lead to losses for both the tenant and the pub company. Therefore, the interests of the pub company and the tenant were aligned. The OFT also stated that it did not consider that beer-ties prevented pubs from providing a large choice to consumers. With regard to the negotiation process and rental agreements between pub companies and tenants, the OFT stated that this was a matter to be taken up by the relevant industry bodies.
The OFT therefore concluded that no further action was necessary. CAMRA has called on the Government to make use of its powers to refer the market to the Competition Commission despite the OFT's views that the market works well.
To read the original Community Weekly Summary (Issue 444 - dated 23rd October 2009) in its entirety please click here.
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