Camra eyes OFT beer tie 'super complaint'

The Campaign for Real Ale (Camra) will approach the Office of Fair Trading (OFT) about making a "super-complaint" about the operation of the beer tie to ensure a thorough investigation and swift resolution to the issue.

Camra had been urged to take action by Labour MP John Grogan, chair of the All Party Parliamentary Beer Group, who is concerned that the on-going Business and Enterprise Committee (BEC) inquiry into pubco power and the tie is deflecting ministers' attention away from other industry issues such as supermarket pricing, duty and red tape.

Grogan fears that the BEC report, due to be published in early May, won't now be considered by ministers until the Autumn and if it recommends an OFT referral, the issue could drag on in to next year.

However, Camra enjoys "super complainant status" under the Enterprise Act, which means that the OFT must publish a response stating how it proposes to deal with a complaint within 90 days.

"I had intended to refrain from further comment until the BEC reported," said Grogan. "I now fear that there could be many further months of uncertainty which could be damaging for all those who have the best interests of the pub at heart. Moreover, there seems to be a lack of clarity amongst ministers about whether they see the operation of the tie as a problem.

"I am concerned that if ministers consider the BEC report for many months they may be less inclined to take action soon on supermarket pricing, tax, rates or red tape. It must also be remembered that about half of the United Kingdom's pubs are either managed or are freehouses and their interests must be considered as well. Pubs really cannot afford a summer and autumn of indecision."

Consumer choice​

In its evidence to the BEC, Camra said that the beer tie did provide a low-cost entry in to pub ownership, was beneficial for the medium sized family brewers, meant pubcos shared in declining beer sales and prevented the domination of the market by the global brewers.

However, it concluded that: "Camra supports the retention of the beer tie but believes action is necessary to ensure that the tie acts in the best interests of consumers' and that '[t]he consumer has been faced with above inflation increases in the price of beer sold in pubs partly as a result of pub companies earning a large margin on their beer sales.

"The consumer has also lost out on greater consumer choice as the beer tie restricts the choice of products available to lessees."

In his letter to Camra chief executive Mike Benner, Grogan added: "If the BEC recommends a reference to the OFT, I think that it would be in the best interests of the whole industry if Camra were at that point to put in a super-complaint to the OFT about the operation of the beer tie. My understanding is that the OFT will then have the option of conducting a market study of the operation of the tie and its effect on price, the rate of pub closures and consumer choice.

"I think it is only by Camra taking this step that we are likely to see significant progress in 2009 in dealing not only with this issue but also the many others which affect the industry."

Super-complaint​

Camra chief executive Mike Benner confirmed it would open talks with the OFT. "It is Camra's view, as expressed last September in evidence to the Business and Enterprise Select Committee, that a 'market study' conducted by the OFT is necessary to assess whether the current operation of the beer tie is in the consumer interest and whether reform is necessary.

"Following the publication of the BEC report Camra will, in compliance with guidance for designated consumer bodies, enter discussions with the OFT regarding the possibility of Camra making a super-complaint."