Campaign for Real Ale

News

Press release: OFT re-opens inquiry into UK pubs market

Friday, 5 February 2010

CAMRA, the Campaign for Real Ale, has reached agreement with the Office of Fair Trading (OFT) to stay its appeal to the Competition Appeal Tribunal challenging the OFT's initial response to CAMRA's super-complaint in October 2009. CAMRA's appeal is now stayed until Sunday August 1st 2010 to enable the OFT to consider further evidence of anti-competitive behaviour by the large pub owning companies. The OFT will now conduct an open public consultation before reaching a final decision.

CAMRA's super-complaint argued that anti-competitive practices are inflating pub beer prices by around 50 pence a pint, restricting consumer choice and leading to chronic underinvestment in the nation's pubs.

Mike Benner, CAMRA Chief Executive, said:

'We are delighted that the OFT has responded to our appeal by agreeing to conduct an open consultation and I encourage all parties to use this opportunity to submit further evidence of anti-competitive practice. The consultation will lead to a new and final decision from the OFT. We are hopeful that on re-examination of the pubs market the OFT will decide to act against anti-competitive behaviour in order to deliver a fair deal for consumers. CAMRA looks forward to working with the OFT to deliver reform of the beer tie so that the pub market works in the interests of consumers.'

CAMRA's fundraising appeal for the reform of the beer tie, which raised over £8,000 since January, will be suspended during the consultation period. The funds will be put towards CAMRA's legal fees. CAMRA reserves the right to re-activate its appeal should it be dissatisfied with the OFT's final decision following the consultation.

ENDS

Notes to editors:

The following summarises the agreement between CAMRA and the OFT:

In response to the super complaint of the Campaign for Real Ale ('CAMRA'), dated July 24th 2009 and concerning the exclusive purchasing agreements entered into by pub-owning companies in the UK with their tenants/lessees ('the Super Complaint'), the OFT published a document entitled 'Response to CAMRA's Supercomplaint' and dated October 22nd 2009 (the 'Document'). The OFT shall take the following action regarding the Document:

a) The OFT shall within 30 days of the Court's Order commence a public consultation on the views outlined in the Document. This consultation shall be publicly announced by way of a press release on the OFT's website and shall remain open for a period of not less than 6 weeks.

b) CAMRA and other interested parties will be afforded the opportunity to make representations to the OFT regarding the OFT's analysis of the issues raised in the Super Complaint as set out in the Document. In particular, the OFT will consider such additional evidence as may be put forward in respect of such matters, and will consider pursuing such additional lines of investigation as may be suggested.

c) The OFT confirms that it shall maintain a regular dialogue with CAMRA during the public consultation process.

d) The OFT shall publish a final decision concerning the Super Complaint having considered such further representations and evidence as it has received during the course of the consultation process, and having pursued such further investigation as it considers appropriate.

July 2009
CAMRA's super-complaint, 'A Fair Share for the Consumer', is published at www.camra.org.uk/supercomplaint. CAMRA's super-complaint centres on the need to reform beer tie arrangements to prevent large companies exploiting tie arrangements that prevent tied publicans from buying beer on the open market at fair prices. CAMRA argues that the wholesale prices paid by tied publicans are considerably higher, around £20,000 per year for an average pub, than would prevail in a competitive market. The lack of competition, particularly in areas dominated by tied pub companies, mean that consumers pay higher prices, and suffer a reduced quality of experience and a restricted range of products. CAMRA calculates that if beer prices had only risen in line with inflation since 1990 then collectively consumers would be better off by £2.5 billion a year.

October 2009
The OFT responds to CAMRA's super-complaint by stating it will take no further action. CAMRA subsequently calls on the Government to refer unfair tie arrangements in the pub sector to the Competition Commission.

December 2009
CAMRA announces it will issue a legal challenge to the OFT, using its entitlement under the Enterprise Act 2002 to appeal the OFT's decision to the Competition Appeals Tribunal (CAT).

January 2010
CAMRA launches the 'Consumers v. OFT Pub Market Ruling' Campaign Fund and calls upon all pub-goers for donations.

For further information:

CAMRA Press Office, 01727 798443
Mike Benner, CAMRA Chief Executive, 07971 591224
Jonathan Mail, CAMRA Head of Public Affairs, 07720 724733

Pub Goers Set to Benefit from Abolition of Land Agreements Exclusion Order

Wednesday, 13 January 2010

The Government has today announced its intention to revoke the Land Agreements Exclusion Order, following a consultation.

In CAMRA's response the consultation, we expressed concerns that the Order was protecting large pub companies from the full force of competition law. We have been campaigning for the Order to be revoked since last summer, as part of our continuing campaign for reform of the beer tie.

Welcoming today's announcement, Mike Benner, Chief Executive, said:

'This is very positive news for pub-goers, small brewers and struggling lessees. The Order is an anomaly which has for too long given legal cover to companies which are party to potentially anti-competitive agreements. The large pub owning companies will now have to review their existing beer tie arrangements in the full knowledge that they will be liable to severe penalties if it is subsequently proven that they have breached Competition Law.'

'CAMRA remains supportive of the beer tie model provided that it offers a fair share of benefits to consumers through greater choice, price competition and quality. We now urge the large pub owning companies to publicly commit to delivering on the basic principle that a tied tenant should be no worse off than they would be if free of tie.'

Click here to read the full press release on the CAMRA website.

For more background on the Exclusion Order click here.

Press release: CAMRA launches 'Consumers v. OFT Pub Market Ruling' Campaign Fund - donate now at www.camraappeal.org.uk

Wednesday, 6 January 2010

'The Office of Fair Trading did not properly examine the lack of competition in the UK pub sector and its impact on consumers. CAMRA is appealing this decision and we urge the country's 15 million regular pub goers to get behind our campaign to help save the Great British Pub and secure a fair deal for consumers.' (Mike Benner, CAMRA Chief Executive)

CAMRA, the Campaign for Real Ale, is today calling on pub goers to donate to its 'Consumers v. OFT Pub Market Ruling' Campaign Fund to assist in campaigning for a sustainable future for UK pubs, through reform of the beer tie.

The beer tie, as currently operated by large pub companies, forces publicans to buy beer at around 50 pence a pint more than they would pay on the open market. These inflated costs are passed onto pub goers through higher prices, poor facilities in pubs and the closure of 7 pubs a day. Reform of the beer tie to allow effective competition between pubs is long overdue.

On December 22nd 2009, CAMRA issued a legal challenge to the Office of Fair Trading (OFT) via the Competition Appeals Tribunal after the OFT rejected CAMRA's super-complaint in October, which focused on high prices, pub closures and restricted choice. Having lodged the appeal, CAMRA is relying on donations from pub goers to fund its ongoing campaign, and has set up a new website to receive donations at www.camraappeal.org.uk.

CAMRA will be supported in its appeal by Edwin Coe LLP, and Europe Economics.

Mike Benner, CAMRA Chief Executive, said:

'We are today calling for pub goers to support CAMRA's campaign to secure a fair deal for consumers by donating to our campaign to ensure the beer tie works in a fair and competitive manner.

'CAMRA has found that a lack of competition in the UK pub market is costing consumers £2.5 billion a year, as well as harming the pub-going experience through reduced quality and choice. The lack of effective competition is also a key reason why 7 pubs a day are closing, causing irreparable damage to local communities.

'Regrettably the OFT did not examine competition in local pub markets which is why we have taken the decision to appeal. The OFT's assertion that consumers benefit from a good deal of competition and choice in the pub sector is in our view not supported by the available evidence.

'CAMRA has pledged funds to the appeal process and is urging consumers to contribute to ensure our campaign stands the best chance of success. This is an historic opportunity for pub-goers to stand up to unfair conditions in the UK pub market and to assist the Office of Fair Trading in understanding the scale of harm to consumers.

ENDS

Notes to editors:

CAMRA, the Campaign for Real Ale, is a not-for-profit, independent consumer organisation which campaigns for real ale, real pubs and consumer rights. CAMRA currently has over 108,000 consumers as members.

CAMRA's super-complaint, 'A Fair Share for the Consumer', was published in July and can be downloaded here.

CAMRA's super-complaint centred on the need to reform beer tie arrangements to prevent large companies exploiting tie arrangements that prevent tied publicans from buying beer on the open market at fair prices. CAMRA argued that the wholesale prices paid by tied publicans are considerably higher, around £20,000 per year for an average pub, than would prevail in a competitive market. The lack of competition, particularly in areas dominated by tied pub companies, mean that consumers pay higher prices, and suffer a reduced quality of experience and a restricted range of products. CAMRA has calculated that if beer prices had only risen in line with inflation since 1990 then collectively consumers would be better off by £2.5 billion a year.

For further information:

Donation hotline, 01727 867201
CAMRA Press Office, 01727 798443
Mike Benner, CAMRA Chief Executive, 07971 591224
Jonathan Mail, CAMRA Head of Public Affairs, 07720 724733
Iain Loe, CAMRA Research and Information Manager, 07801 706607
Jon Howard, CAMRA Press Officer, 07939 425471

CAMRA launch legal appeal

Tuesday, 22 December 2009

CAMRA has today announced that it will use its powers under the Enterprise Act 2002 to issue a legal challenge to the Office of Fair Trading's (OFT's) recent decision to reject its super-complaint on the beer tie, by referring the OFT's decision to the Competition Appeals Tribunal. CAMRA's super-complaint aimed to secure a sustainable future for Britain's pubs, a fair deal for consumers and stem the flow of the 52 pubs closing every week across the UK.

Mike Benner, CAMRA's Chief Executive said:

'We've seen the consumer watchdog scrutinised in previous years with the success of the Association of Convenience Stores' appeal in 2005 in overturning the OFT's decision at Tribunal level. Pending the success of our appeal, CAMRA remains optimistic of Government intervention or a referral to the Competition Commission for a full investigation into the UK pub market.'

Bob Young, a former member of the Monopolies and Mergers Commission and respected Principal of Europe Economics, has said the OFT's response was "as inadequate as CAMRA's super-complaint was compelling.

The OFT has not seriously considered whether there is fair competition at a local level which ensures that consumers, or pub landlords for that matter, get the best deal. This is a critical shortcoming in the OFT's response to CAMRA."

The appeal will depend upon CAMRA members, associated trade bodies and all those with a stake in the industry helping us to raise the money. CAMRA is therefore launching this fundraising campaign and you can make a donation here.

Further information:

Press release: Office of Fair Trading Faces Legal Challenge From Consumers

Tuesday, 22 December 2009

CAMRA, the Campaign for Real Ale, has today announced it will issue a legal challenge to the Office of Fair Trading's decision to reject its super-complaint on anti-competitive practices in the UK pub market. CAMRA is pledging funds to the appeal, but is depending on consumers helping to raise further funds to ensure this vital legal challenge can stand the best chance of success.

In October the consumer group criticised the Office of Fair Trading (OFT) for failing to protect consumers by taking no further action to address consumer detriment in the pub market following CAMRA's super-complaint submitted in July.

Under the Enterprise Act 2002, CAMRA is entitled to appeal the OFT's decision to the Competition Appeals Tribunal, and has decided upon this course of action to continue fighting anti-competitive practices in the UK pub market.

From Tuesday January 5th 2010, CAMRA is calling upon consumers to visit the CAMRA website and contribute to the 'Consumers v. OFT Pub Market Ruling' Campaign Fund.

Mike Benner, CAMRA Chief Executive, said:

'CAMRA has taken the decision to appeal due to the inability of the OFT to deal with the problems affecting the UK pub sector.

'CAMRA's super-complaint to the OFT was based on securing a fair deal for the pub-goer, and building a sustainable future for Britain's pubs. However, we believe the OFT did not take reasonable steps to understand the pub sector, and more generally why over 50 pubs are closing per week across the UK.

'We've seen the consumer watchdog scrutinised in previous years with the success of the Association of Convenience Stores' appeal in 2005 in overturning the OFT's decision at Tribunal. Pending the success of our appeal, CAMRA remains optimistic of Government intervention or a referral to the Competition Commission for a full investigation into the UK pub market.'

Bob Young, a former member of the Monopolies and Mergers Commission and respected Principal of Europe Economics, has said the OFT's response was "as inadequate as CAMRA's super-complaint was compelling. The OFT has not seriously considered whether there is fair competition at a local level which ensures that consumers, or pub landlords for that matter, get the best deal. This is a critical shortcoming in the OFT's response to CAMRA."

Mike Benner concluded:

'We now urge consumers and associated trade bodies to get behind our 'Consumers v. OFT Pub Market Ruling' Campaign Fund in the New Year and support our appeal.'

ENDS

Notes to editors:

CAMRA, the Campaign for Real Ale, is a not-for-profit, independent consumer organisation which campaigns for real ale, real pubs and consumer rights. CAMRA currently has over 107,000 consumers as members.

CAMRA's super-complaint, 'A Fair Share for the Consumer', was published in July and can be downloaded here.

CAMRA's super-complaint centred on the need to reform beer tie arrangements to prevent large companies exploiting tie arrangements that prevent tied publicans from buying beer on the open market at fair prices. CAMRA argued that the wholesale prices paid by tied publicans are considerably higher, around £20,000 per year for an average pub, than would prevail in a competitive market. The lack of competition, particularly in areas dominated by tied pub companies, mean that consumers pay higher prices, and suffer a reduced quality of experience and a restricted range of products. CAMRA has calculated that if beer prices had only risen in line with inflation since 1990 then collectively consumers would be better off by £2.5 billion a year.

For further information:

CAMRA Press Office, 01727 798443
Mike Benner, CAMRA Chief Executive, 07971 591224
Jonathan Mail, CAMRA Head of Public Affairs, 07720 724733
Iain Loe, CAMRA National Spokesperson, 07801 706607
Jon Howard, CAMRA Press Officer, 07939 425471

CAMRA considers legal appeal

Tuesday, 22 December 2009

CAMRA continues to lobby Government to overturn the Office of Fair Trading (OFT) decision to take no action to reform beer tie agreements to deliver a fair deal for consumers.

In November, OFT threw out CAMRA's super-complaint on the way the beer tie is being operated, saying there was no evidence it was having a detrimental effect on consumers. In light of the OFT's failure to act CAMRA staff have met with ministers and urged them to reject the OFT ruling, saying it failed to address the legitimate concerns raised both in the super-complaint and the damming Business and Enterprise Committee report.

Consumer minister Kevin Brennan and business minister Pat McFadden were told the OFT ruling did nothing to address the imbalance in the landlord/lessee partnership which is bad news for consumers, leading to higher prices, less choice and under-investment in pubs.

The CAMRA delegation of Chief Executive Mike Benner, Jonathan Mail and Emily Ryans was supported by long time CAMRA supporter Lord Bilston, formerly the MP Dennis Turner.

Head of public affairs and policy Jonathan Mail said it was a positive sign that the ministers agreed to the meeting and we used the opportunity to reiterate our position that the government must overturn the OFT decision.

Jonathan said:

'We voiced our concerns over exploitation of the tie by the pubcos and the higher wholesale prices being paid by tied tenants compared to free-of-tie licensees.We highlighted the differences between wholesale prices paid by tied tenants and those free-of-tie and repeated our concerns that consumers are suffering higher prices, reduced choice and loss of valued community pubs.'

Further information:

  • The Commons Business, Innovation and Skills Committee, formerly known as the Business and Enterprise Committee (BEC) has held another hearing on the beer tie and it hasn't ruled out a possible referral to the Competition Commission. In its original report, the BEC had recommended a full-scale review of the tie by the Competition Commission and "urgent action by the Government" and it could repeat these calls when it reports later this month.

  • CAMRA has met with the European Commission and Members of the European Parliament in Brussels to express concern at the OFT's failure to act.

  • CAMRA's super-complaint, 'A Fair Share for the Consumer', was published in July and can be downloaded here

CAMRA meets with ministers to discuss reform of beer tie

Wednesday, 25 November 2009

Yesterday a delegation from CAMRA, alongside Lord Bilston, met with two Government ministers to discuss the beer tie as part of our continuing work to challenge the OFT's response to our super-complaint.

Jonathan Mail, Emily Ryans and Mike Benner met with Pat McFadden (Minister of State for Business, Innovation and Skills) and Kevin Brennan (Consumers Minister).

In the meeting, we stressed the failings in the OFT's analysis, providing ministers with a brief highlighting where the OFT was wrong and urging them to overturn the OFT's decision and refer the matter to the Competition Commission for a full market investigation.

Jonathan Mail, CAMRA's head of policy and public affairs, said:

"It's very encouraging they agreed to this meeting and they have not dismissed the possibility this decision would be overturned."

"The meeting was positive and ministers seemed to have a good understanding of the issues. We look forward to hearing their response after their discussions with industry representatives."

We also discussed the proposed Code of Conduct between pubcos and tenants, and expressed our concern that the Code is not legally binding and there's no obvious dispute resolution system for lessees.

Government must overrule OFT

Thursday, 22 October 2009

This morning, the Office of Fair Trading (OFT) announced that it will be taking no action following CAMRA's super-complaint on the beer tie.

Following this inadequate response, CAMRA is demanding that the Government take immediate action to refer unfair tie arrangements in the pub sector to the Competition Commission for urgent investigation.

Mike Benner, CAMRA's Chief Executive, said:

"The OFT decision fails to address the legitimate concerns raised both in our super-complaint and the BEC report and does nothing to address the imbalance in the landlord/ lessee partnership which is leading to higher prices, less choice and weak investment in pubs."

"It is difficult to see how the OFT can argue that competition is working well in the pubs sector when demand is falling, yet prices are rising. 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."

For more information, please see CAMRA's press release

Read the full response from the OFT

Press release: Government must overrule OFT decision on pub company ties

Thursday, 22 October 2009

Pub company ties must be referred to the Competition Commission urgently

CAMRA, The Campaign for Real Ale, has criticised the Office of Fair Trading (OFT) for failing to protect consumers by taking no action following the consumer group's super-complaint submitted in July and has called on the Government to refer unfair tie arrangements in the pub sector to the Competition Commission.

In this morning's response to CAMRA's super-complaint, the OFT has said that consumers benefit from a good deal of competition and choice in the pubs sector, but CAMRA has challenged this at a time when prices are rising and seven pubs are closing every day.

CAMRA's super-complaint followed the hard-hitting report from the parliamentary Business and Enterprise Select Committee (BEC) which called for urgent action to re-balance the relationship between pub-owning companies and their lessees in the interest of consumers.

Mike Benner, CAMRA's Chief Executive said, "We do not accept that there is sufficient competition between pubs or adequate consumer benefit from competition and choice within this sector. The OFT decision fails to address the legitimate concerns raised both in our super-complaint and the BEC report and does nothing to address the imbalance in the landlord/ lessee partnership which is leading to higher prices, less choice and weak investment in pubs."

Mr Benner added, "It is difficult to see how the OFT can argue that competition is working well in the pubs sector when demand is falling, yet prices are rising. 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."

Mike Benner said, "There simply cannot be effective competition between all pubs when many pub landlords are placed at a huge disadvantage, by paying wholesale beer prices that can be around 50p a pint greater than their free of tie competitors."

The OFT has found that higher prices exist for some products in tied pubs, but claims that these are marginal, with a pint of lager costing drinkers 8p more in a tied pub compared to a free house. CAMRA, however, claims that this fails to fully consider that higher prices in tied pubs lead to artificially higher prices in other local pubs through lack of effective price competition and contends that today's cash-strapped drinkers would not regard an 8p premium as marginal.

CAMRA is urging Lord Mandelson to overrule the OFT by referring anti-competitive and unfair tie arrangements of the large pub operating companies to the Competition Commission for an urgent investigation. In taking this decision Lord Mandelson will help secure a sustainable future for Britain's pubs and a fair deal for Britain's 14 million pub-goers.

CAMRA is also calling on the Government to take immediate legislative steps to protect pub landlords and therefore consumers from unfair and anti-competitive contract terms.

CAMRA has called for a policy framework to support community pubs which benefit society following the publication of 'Pubs and Places' by the Institute for Public Policy Research (ippr) in March.

Dr. Rick Muir, author of 'Pubs and Places', said, "Pubs play a key role in community life by providing a friendly and safe environment for people to socialise with friends, family and their wider community. The positive social contribution of many pubs is under threat as a result of high rents and high tied beer prices imposed unfairly by large pub owning companies. Pub landlords are rightly very concerned that unfair tie arrangements are having a serious impact on their ability to compete by reducing prices and improving facilities. The relationship between large pub owning companies and pub landlords needs urgent rebalancing and both the Government and Competition Authorities have their roles to play. In addition a new Government policy framework is required to support, incentivise and reward well-run community pubs."

In calling for referral to the Competition Commission, The BEC report stated the disappointment of the Select Committee that the OFT has previously failed to act on this matter and had refused to acknowledge the current problems in the market. The report said, on the point that the market is working, that "if pubcos push too hard and are too greedy they will fail. But on the way bad companies will inflict real damage on their direct customers, the lessees, and on their indirect customers, ordinary drinkers."

Mr. Benner added, "The Business and Enterprise Select Committee have been proven correct in the view they expressed early this year that an OFT investigation would not be satisfactory and that the Government should now assume responsibility."

ENDS

Notes to editors:

CAMRA's super-complaint, 'A Fair Share for the Consumer', was published in July and can be downloaded here

CAMRA's super-complaint called on the OFT to take action against anti-competitive practices in the UK pub market which are resulting in high prices in pubs, lower amenity, restricted choice and pub closures.

For further information:

CAMRA Press Office, 01727 798443
Mike Benner, CAMRA Chief Executive, 07971 591224
Jon Howard, CAMRA Press Officer, 07939 425471
Jonathan Mail, CAMRA Head of Public Affairs, 07720 724733
Iain Loe, CAMRA National Spokesperson, 07801 706607

Joint call for reform of beer-tie

Wednesday, 14 October 2009

It was announced today that CAMRA has joined a number of national organisations in forming a new Independent Pub Confederation (IPC), representing the views of consumers, licensees and small brewers. The Confederation will work together to lobby government, MPs and landlords, particularly on issues around the beer tie which unfortunately were not resolved by the recent pub sector mediation in which CAMRA took part.

We look forward to working with this new grouping on all issues on which we agree, but of course where CAMRA's campaigning priorities cannot be pursued through the Confederation, we will continue to pursue these independently.

Mike Benner, CAMRA's Chief Executive has commented on the Confederation, saying:

"We are disappointed that mediation talks have failed to deal with the issues raised in the BESC report and CAMRA's super-complaint, but the formation of the Independent Pub Confederation is a very positive step forward, providing a common voice for consumers, licencees, lessees and small brewers. The prospects for industry self regulation to re-balance the relationship between pub owning companies and their tenants now appear slim and it is likely that intervention by the Government and Competition Authorities will be the only route to deliver a fair deal for consumers in the UK pub market."

For more information on the IPC and recent developments, please download our press release.

Boost for bid to reform beer tie

Thursday, 27 August 2009

CAMRA's campaign for reform of the beer tie has been given a boost from a new government consultation.

The government has said it could scrap the Land Agreements Exclusion Order which currently exempts deals, such as the tie, from the ban on anti-competitive practices.

Head of policy and public affairs Jonathan Mail said CAMRA will campaign to have the order revoked and is seeking to build a coalition of support including Fair Pint, Federation of Small Businesses and the Society of Independent Brewers.

Said Jonathan: "Revocation of the order will put pressure on all companies to cease using restrictive covenants and also require them to implement fairer beer tie arrangements which will improve beer choice, reduce pub closures and allow tied tenants to invest in the future of their businesses.

"The announcement that the government is minded to scrap this order will make it much easier for the competition authorities to deal with CAMRA's supercomplaint, which calls for action to address the consumer detriment caused by excessive pub rents and high beer prices faced by tied pub businesses."

Press release: 'Super-Complaint' prompts OFT probe into Pub Market CAMRA Demands a 'Fair Share' for Consumers

Friday, 24 July 2009

CAMRA, the Campaign for Real Ale, has today exercised its 'super-complaint' power to require the Office of Fair Trading (OFT) to fast-track consideration of anti-competitive practices in the UK pub market which are resulting in high prices in pubs, lower amenity, restricted choice and pub closures.

CAMRA's 'super-complaint', 'A Fair Share for the Consumer', highlights that high rents and 'tied' beer prices are driving many good pub landlords out of business and contributing to the destruction of Britain's pubs through pub closures and chronic under investment in pub facilities. Currently more than seven pubs close every day.

Mike Benner, Chief Executive, said, "Exploitation of 'beer tie' agreements and the unfair method of setting pub rents are harming consumers and society as a whole. It is enshrined in EU law that consumers must get a fair share of the benefits arising from exclusive purchasing deals such as the 'beer tie', but this is often not the case. We hope that the OFT will act to deliver a fair share for Britain's 14 million regular pub goers. Reform of the 'beer tie' along with a framework of support from Government is urgently required to save the pub from extinction."

'Tied' Beer Prices

More than half of the pubs in the UK are run under 'tie' arrangements which prevent pub landlords buying beer and other products on the open market meaning many pub landlords are forced to pay over the odds by around 50 pence a pint.

Mr Benner said, "The 'tied' model works best when it is a true partnership, where the risks and benefits are shared equally between pub owning company and the pub landlord. Unfortunately, this is not the current reality. Pub-owning companies are able to earn excessive profits by increasing the cost of beer to their 'tied' pub landlords who have no choice but to accept high prices and pass them onto the consumer. This practice has led to higher prices in pubs and has widened the gap between pub and supermarket prices encouraging people to shun the pub for their armchair."

Pub rents; a flawed system

CAMRA is calling for the OFT to review the way in which pub rents are set as excessive rents translate into higher prices for pub-goers. The current system is open to abuse as it is based on a whole range of entirely hypothetical assumptions and specifically ignores the fact that 'tied' pub landlords have to pay above market prices for beer and other products.

Mike Benner said, "Pub landlords should not be denied access to the information and assumptions used to calculate a rent figure. An independent and affordable rent dispute system is urgently needed to avoid pub landlords being forced into agreeing excessive rents because they cannot afford to contest it. The rent charged to 'tied' pub landlords must fully take into account the financial penalty they face as a result of being unable to purchase beer and other products on the open market. The current system is seriously flawed and is leading to higher prices in pubs and contributing to the high rate of pub closures."

Beer Choice; securing access to market for small brewers

Mike Benner said, "There is enormous consumer interest in local produce and it is crazy that local brewers are prevented from selling their beers to local pubs. We believe a 'guest beer' regulation, so that 'tied' pub landlords can buy a guest real ale from a brewer of their choice, should be introduced to overcome this. This alone would boost consumer choice and have the impact of driving down pub beer prices through competition."

Pub Closures; stamp out restrictive covenants

CAMRA is calling for regulation to prevent pubs being sold with 'restrictive covenants' preventing them from being used as licensed premises in the future.

Mr Benner said, "At a time of accelerating pub closures it is disgraceful that companies are allowed to sell pubs and deliberately prevent them ever being reopened. Pubs are at the heart of so many of our communities and it is for the market and the community to decide if a pub is a viable and sustainable business."

The Way Forward

Mr Benner added, "In parallel to its 'super-complaint' CAMRA, along with the Fair Pint Campaign and the Federation of Small Businesses, are participating in efforts to achieve an industry-wide mediated settlement to overcome the current unfairness of the 'beer tie' and pub rents. If mediation is successful then it is possible the OFT would decide to use its powers to make the outcome of the mediation legally binding as an alternative to further action including reference to the Competition Commission for a lengthy market investigation."

"Total abolition of the 'beer tie' would be a grave error and would be likely to turn the current storm of pub closures into a hurricane and lead to increased domination of the beer market by global brewers. Abolishing the 'tie' would be the classic example of 'chucking the baby out with the bath water."

"Our 'super-complaint' will give the OFT the opportunity to take swift action to ensure the 'beer tie' works fairly in future. Clearly there are a number of reasons why Britain's pubs are under pressure, not least the recession and our punitive beer tax regime, but the evidence is clear that the 'tie' must be reformed if these valuable small businesses are to survive and thrive. In response to the BEC report, some companies have taken some positive steps to improve matters and we welcome that progress, but legally-binding reform is still required to ensure a fair deal for consumers."

"EU competition rules demand that exclusive supply agreements between pub owning companies and pub landlords must result in a fair share of the benefit for consumers. The 'tie' is a restrictive agreement, but it should work through countervailing benefits for pub landlords to enable them to run a viable and sustainable pub providing good value and quality to their customers. With increasing pub prices, failing pub businesses and unprecedented pub closures, the model is faltering and must be reformed as a matter of urgency."

ENDS

Notes to editors:

CAMRA's 'super-complaint', 'A Fair Share for the Consumer', is published today and can be downloaded here. It contains various suggestions to the OFT for remedies to reform the 'beer tie'.

CAMRA is a designated consumer body within the Enterprise Act 2002. A 'super-complaint' may submit views on 'any feature, or combination of features, of a market in the UK for goods or services is or appears to be significantly harming the interests of consumers'.

The 'super-complaint' process is intended to be a fast-track system for designated consumer bodies. The OFT has 90 days to respond to the 'super-complaint' and, if upheld, has the option of carrying out a market study, agreeing legally binding undertakings or a direct referral to the Competition Commission.

For further information:

CAMRA Press Office, 01727 798443
Mike Benner, CAMRA Chief Executive, 07971 591224
Jonathan Mail, CAMRA Head of Policy and Public Affairs, 07720 724733
Iain Loe, CAMRA Research and Information Manager, 07801 706607

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