Competition watchdog beer-tie decision leaves Derbyshire landlords dismayed
A DECISION made by a competition watchdog over restrictive contracts between pub companies and tenants has left several Derbyshire landlords disappointed.
The Office of Fair Trading has said it will not be taking any further action over a complaint that such tenancy agreements were forcing landlords out of business.
The contracts, commonly known as beer ties, allow pub companies to compel their tenants to buy drinks and other goods from them.
The Campaign for Real Ale, which supports consumer rights in the beer and drinks industry, registered a "super complainant" against the ties.
It said the contracts protected pub-owning companies, leading to higher beer prices and less choice for consumers.
But the Office of Fair Trading has now dismissed the complaint, which Derbyshire landlords have described as a "blow".
Dave Mountford, who runs The Rising Sun in Middleton, who has a tenancy agreement with Burton-based Punch Taverns, said: "The whole system needs a massive overhaul because I don't know how many Derbyshire pubs are shutting over this non-economic issue.
"The Rising Sun is just not making the right levels of gross profit at the moment and pubs can't compete while this issue goes on."
Graham Yates, landlord of the Brunswick Inn, in Derby, has a tie with Leicester's Everard's.
He said: "I'm luckier than others because half the beer from my pub is brewed here, but this is not the news I wanted to hear.
"I was hopeful of a better outcome. It would have meant a bit more variety in the pub and some lower prices – hopefully, at some point, there will be moves towards this."
The Office of Fair Trading conducted a 90-day investigation into the issue before deciding to reject Camra's complaint.
A spokesman for the watchdog said: "The evidence indicates, at a national, regional and local level, there is no significant concentration of pubs owned by an individual pub company.
"There is generally competition between a number of different pub operators. We have not found evidence to suggest that pub companies are acting jointly to increase prices or rents for their lessees."
But John Arguile, branch treasurer for the Derby committee of Camra, said trade was suffering because of the terms imposed by the companies.
He said: "It's a bad piece of news and a blow for Camra. But we will not let this upset us."
Comments
by David, Littleover
Friday, October 23 2009, 8:37AM
“There can be few other retail businesses where (a) you can and must only buy from one supplier.
(b) That same supplier also controls the rent you pay for the shop you sell their product from.
In such a climate has grown the 'managed house' syndrome which has (to a large extent)brought about the decline of public houses. The breweries with tied houses forced out successful tenants because of the monopolies commission findings 30 years ago(?). They did this by imposing new terms which no sensible tenant could make a living by.
A true tenancy should be where a licensee rents a pub/shop, and can buy his stock from wherever he/she pleases. This last ruling is a travesty and shows how little the law makers understand about the licensed trade's commercial greed.”