News and Press
OFT publishes final decision on "beer tie"

On 14 October the Office of Fair Trading (OFT) published its final decision on the competitiveness of the pub industry. This decision followed a complaint by the Campaign for Real Ale that the "beer tie", which requires pub lessees to purchase beer solely through their pub-owning landlords, has led to market failures and a lack of competition in this sector. Following a consultation period and detailed analysis of the operation of the industry, the OFT has concluded that consumers benefit from considerable competition and choice between pubs, and this competition prevents the beer tie from inflating pub beer prices beyond competitive levels.

TLT's competition team comments: "The OFT's decision affirms its initial response last year that the UK's pub sector is competitive overall and does not require a formal market investigation. The decision confirms the approach that the OFT will focus on the impact commercial arrangements have on consumers. Although concerns have been raised about the contractual relationship between pub companies and their lessees, the OFT considers it does not currently have a significant adverse effect on customers."