In a statement issued this morning, the OFT said it had concluded that the UK pub sector is "competitive overall" and that it found no evidence to suggest that the tie, which requires pub lessees to buy beer solely through the company that owns their pub, is having an adverse effect on consumers.
Camra first lodged its super-complaint with the OFT in July last year, and the OFT first responded in October but decided to consult on the findings in its reponse following an appeal by Camra to the Competition Appeal Tribunal, which is ongoing.
The OFT said: "Following this work, the OFT has concluded that consumers benefit from considerable competition and choice between pubs and that this competition prevents the beer tie from being used to inflate pub beer prices beyond competitive levels. The OFT also concluded that the beer tie has not prevented tied pubs from offering a wide choice of beers to consumers, having found that pub-owning companies generally source beer from a considerable range of suppliers, including smaller brewers."
Ann Pope, OFT senior director of goods, said: "The OFT appreciates how important local pubs are to many consumers and local communities. Camra's super-complaint has provided a timely opportunity to examine the pub sector, as the beer tie model has attracted considerable attention recently. After carrying out detailed analysis, we have found that the sector is competitive overall and that there is no need for the OFT to take further action at the moment.
"The OFT recognises that many pub lessees are concerned about issues regarding the contractual relationship with their pub company and we note that the pub industry is taking steps to address some of these concerns. Our focus, however, has been to assess whether the market is working well for consumers."
But Camra called the OFT's decision "remarkable" and vowed to keep up the pressure on the issue.
Mike Benner, Camra chief executive, said: "Camra's initial reaction to the OFT's decision is that it is based on a blinkered and selective consideration of the evidence. The OFT has squandered an opportunity to support a process of industry self-regulation to improve competition and benefit consumers. Today's OFT decision does nothing to change the fact that the business secretary, Vince Cable MP, has publicly stated that the pub companies are on probation and that they will face legislative action if they fail to reform by June 2011."
"The OFT recognises the concerns of tied pub landlords but has failed to recognise the impact of these on consumers. It is extraordinary that the OFT appears to have dismissed as irrelevant the treatment of tied pub landlords by the large pub companies. A balanced and fair relationship between tied pub landlords and the large pub companies is crucial to ensuring the pub market works well for consumers."
"The OFT's own analysis recognises that tied pub landlords on average pay around £20,000 more for their beer every year as a result of being tied and unable to purchase beer on the open market. Camra, unlike the OFT, recognises that higher costs imposed upon tied pub landlords will inevitably be passed onto consumers through higher prices, under investment and pub closures."
By Neil Gerrard
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