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OFT Clears Pub Ties
An enquiry by The Office of Fair Trading has found no evidence to suggest that the relationship between pub companies and the landlords of tied houses is harming competition in the sector.
The enquiry was instigated by a complaint from Camra (Campaign for Real Ale) who now plan to lobby Lord Mandelson to overturn the OFT’s findings.
Camra CEO Mike Benner told the BBC ;
“We do not accept that there is sufficient competition between pubs or adequate consumer benefit from competition and choice within this sector, urgent action is now required by government to stem the flow of pub closures, build a sustainable future and ensure that consumers get a fair share of the benefit from tied agreements as demanded by competition law.”Simon Williams from the OFT responded ;
“Any strategy by a pub-owning company which compromises the competitive position of its tied pubs would not be sustainable, as this would result in a loss of sales, pub-owning companies are not therefore protected from competition by virtue of the supply ties agreed with their lessees. We understand that our response to Camra comes at a difficult time for the industry, but the evidence indicates that consumers benefit from a good deal of competition and choice within this sector.”The OFT’s decision saw shares across the pub trade rise substantially, with shares in Enterprise Inns (7,500 pubs) rising 23.4%, and those of Punch Taverns (7,600 pubs) rose 14.8%.
Tags: OFT,tied house