The Beer Tie: Is this the end of the debate?

So what next in the battle over the beer tie? Many in the trade are hoping CAMRA and the anti-pubco brigade will let things lie after the Office of Fair Trading's (OFT) latest ruling.

Predictably, the British Beer & Pub Association (BBPA) said it hoped the OFT's decision - that the tie is good for competition and does not harm consumers - draws a line under "many issues" and allows the industry to "move forward".

Enterprise Inns also released a lengthy statement pointing out that the tie had been reviewed "no fewer than 26 times since 1966, at considerable expense to all concerned".

Punch Taverns, meanwhile, was silent on the decision. But the Independent Family Brewers of Britain's (IFBB) statement on the issue left people in little doubt that pubcos, big and small, have had enough of CAMRA sticking its oar into the beer tie debate.

Chairman Paul Wells said the "ongoing negative publicity has been detrimental to the industry as a whole". And he added: "The IFBB and its members are now looking forward to working with CAMRA to ensure the ongoing success of cask ale."

Other senior industry figures have privately expressed hope that CAMRA will give up lobbying on the tie.

Done and dusted?

But any hope that this is the end of the matter can only be described as wishful thinking.

For a start, the pubcos are still under the close eye of MPs on the Business, Innovation and Skills (BIS) committee.

Chairman Adrian Bailey MP is expected to call in Punch and Enterprise for another evidence session in Parliament, next year. The committee will want to see that companies have stuck to their promises about reforms to their business practices. The final deadline for this is June 2011.

In the meantime, CAMRA says it is "considering its next move". Jonathan Mail, CAMRA's head of policy and public affairs, said it now has two months to decide whether to take its appeal further. "We need to get some advice on where we go from here and we're also waiting to see whether the OFT and Competition Commission merges," he said.

In the meantime, Mail has raised three key areas the group is looking at that emerged from the 157-page report. These are:

• The licensee should be seen as a consumer ​

CAMRA is upset the OFT has "neglected to look properly at the position of whether a lessee is a consumer in their own right". The Enterprise Act sets out that they should do that, says Mail.

He adds: "They have just looked at what's going on in the pub (with customers) and have been completely blind to what's going on further down the chain."

• Comparison between tied and free-of-tie licensees ​

CAMRA asked the OFT to carry out a detailed analysis of rents charged to tied lessees compared with free-of-tie pubs. The OFT received around 20 extra submissions after it launched its consultation in February, in addition to the 70 it received after the original super-complaint a year ago.

The OFT report said: "Overall, the OFT considers the costs and risks faced by tied and free-of-tie lessees are broadly similar."

However, Mail suggests the OFT has assumed free-of-tie licensees buy their beer directly from breweries, whereas most get it cheaper from a wholesaler - and are therefore able to charge significantly less than a tied tenant.

• Restrictive covenants ​

This was one piece of good news for CAMRA. The OFT agreed that "in certain circumstances the use of restrictive covenants on the sale of a pub has the potential to harm consumers".

The report added: "In particular, the use of restrictive covenants can act as a barrier to market entry for pub operators, which can limit competition within a particular area, potentially leading to higher prices and reduced choice and quality for consumers." Mail welcomed this, saying: "We will be pursuing discussions on this point."

The OFT also found out which large pubcos had used restrictive covenants since 2004, and how often. It revealed:

• Enterprise Inns has used restrictive covenants in approximately 20 per cent of pub disposals since 2004

• Punch Taverns, Admiral Taverns, Greene King and Marston's said that restrictive covenants were used in between one and five per cent of pub disposals since 2004

• Scottish & Newcastle UK and Trust Inns have not sold any pubs with restrictive covenants in this period.

However, Punch and Enterprise have since publicly stated they do not intend to impose restrictive covenants in future.

So, the tie debate should die down for a while, but there's no doubting the strength of feeling around this issue still.

For the pubcos, it will be worth keeping the Champagne on ice.

Timeline: the tussle over the tie

May 2009

MPs on the Business and Enterprise (BEC) select committee call for the beer tie to be "severely limited", arguing the way the tie is operated pushes up prices

July 2009

CAMRA submits a super-complaint to the OFT claiming that tied beer prices and high rents are driving good licensees out of business and harming consumers

October 2009

OFT responds to super-complaint saying it had found "no evidence" the beer tie was anti-competitive or adversely affecting consumers, and would take no further actionJanuary 2010

CAMRA launches an appeal against the OFT's decision with the Competition Appeals Tribunal and asks for financial support from pub customers

February 2010

The OFT opens a public consultation on its response to the super-complaint, to avoid a costly legal battle with CAMRA

March 2010

A follow-up report by BIS committee MPs gives pubcos until June 2011 to get their houses in order. They also urge the OFT to look "carefully" at CAMRA's super-complaint

October 2010

The OFT publishes its follow-up report saying it had found the beer tie good for competition and that it does not harm consumers