Norwich publicans say OFT got it wrong on ‘beer tie’ ruling
Norwich publicans say OFT got it wrong on 'beer tie' ruling
Publicans in Norwich said today that controversial 'beer ties' whereby pub companies (pubcos) compel tenants to buy their drinks do damage competition – despite a government watchdog finding otherwise.
The Office of Fair Trading (OFT) ruled in October last year that landlords being forced to buy beer from pub owners was not anti-competitive.
But it reopened the investigation in February after the Campaign for Real Ale (Camra) lodged an appeal, and warned that high rents and 'beer ties' were forcing good landlords out of business and leading to higher prices for consumers.
The watchdog said punters had a wide choice between pubs and that this competition prevented the 'beer tie' from being used to inflate pub beer prices beyond competitive levels.
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Pubs had not been prevented from offering a wide choice of beers to consumers, it added, saying that pub-owning firms tended to source beer from a wide range of suppliers, including smaller brewers.
However, Camra estimates tied pub landlords pay around �20,000 more for their beer a year as they cannot buy on the open market, which Camra said 'inevitably' means higher prices for consumers.
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Dave Baldry is landlord at the Artichoke in Magdalen Road, north Norwich, which is owned by Enterprise Inns.
He said: 'I don't see how the OFT can come up with that conclusion.
'The price of beer from pub companies is a lot more than you could buy it for on the market and being tied to a pubco does damage competition.
'Enterprise Inns has been more helpful in some aspects recently, but there's no movement on beer prices.'
Sue Coleman, who is landlady at the Punch Taverns-owned Stanley pub, also in Magdalen Road, said that being tied to a pub company meant its gross profit margins would never be as great as freehouses.
She also blasted some pub companies – but not Punch Taverns – for tying up tenants with everything, and not just beer.
Camra branded the OFT decision as 'blinkered' and vowed to keep up the pressure to see the 'beer tie' reformed.
Mike Benner, Camra chief executive, said: 'A balanced and fair relationship between tied pub landlords and the large pub companies is crucial to ensuring the pub market works well for consumers.'
Britain's large pub companies have always denied any wrongdoing, but Business Secretary Vince Cable told MPs recently that pubcos were 'on probation' and promised legislative action if they fail to bring in changes by next June.
The industry is in the process of bringing in a new voluntary code of practice, with new lease options for tied landlords.
The Evening News has been urging punters to return to pubs throughout our Love your Local campaign.
To see more stories from the campaign, visit www.eveningnews24.co.uk/loveyourlocal.
What is your pub doing to celebrate Halloween? Ring reporter David Bale on 01603 772427 or email firstname.lastname@example.org