ALMR cautiously welcomes OFT beer tie probe

Trade group the Association of Licensed Multiple Retailers (ALMR) has welcomed confirmation that the beer tie will be investigated by the Office of Fair Trading (OFT) but warned the industry needs "reform not revolution".

The OFT will investigate the pubco model after CAMRA today used its status as a super complainant and suggested high rents and 'tied' beer prices are driving many good pub licensees out of business.

Kate Nicholls, head of communications at the ALMR, said: "The relationship between the major, national pub companies and their tenants has come under tremendous strain over the past year.

"This is because the tied lease model has been insufficiently flexible to adapt quickly to the macro-economic downturn, resulting banking crisis and soaring operating costs.

"Today's complaint is a reflection of that reality and an inevitable consumer response to the Business & Enterprise Committee report into the pubcos."

She added: "We agree with CAMRA that the status quo is not an option, but what the trade needs now is reform not revolution."

The ALMR initiated an industry wide mediation process in response to the BEC report, which Nicholls said is making good progress.

The formal mediation process will conclude at the end of September with the resulting agreement presented to the competition authorities ahead of the October 17 deadline by which Lord Mandelson must respond to the Business & Enterprise Committee report.

Meanwhile, anti-beer tie campaign group Fair Pint, which is also involved in the mediation process, added its support to the super complaint but, unlike CAMRA, is calling for abolition of the tie rather than reform,.

Steve Corbett of Fair Pint said: "CAMRA are right to point out that reform is urgently needed to rebalance the relationship between tenants and their landlord.

"Fair Pint believes that the most effective way of doing this would be through reforms which would sweep away anachronistic practices like the tie and ensure that the system of setting rents is fair and transparent."

He added: "The continuation of the tie, even if limited to companies who own fewer than 500 pub will leave the door open to the continuation of anti-competitive practices in the sector."