OFT gives pub firms the all-clear

The Office of Fair Trading (OFT) said it found no evidence that "tied" prices - where pub companies compel tenants to buy drinks from them - were harming competition for consumers.

The Campaign for Real Ale (Camra) had filed its first ever super complaint to the OFT in July over fears that high rents and beer ties were forcing good landlords out of business.

But the OFT said it found "generally effective competition between pubs" and would not be taking further action.

The OFT dismissed Camra concerns that supply ties were protecting pub-owning companies, leading to higher beer prices and less choice for consumers.

In response to Camra's complaints over pub rent calculations, the OFT said while it had received a number of submissions from worried pub lessees, its work was to focus on competition issues and the impact on consumers.

Simon Williams, senior director at the OFT, said: "Any strategy by a pub-owning company which compromises the competitive position of its tied pubs would not be sustainable, as this would result in a loss of sales.

"Pub-owning companies are not therefore protected from competition by virtue of the supply ties agreed with their lessees.

"We understand that our response to Camra comes at a difficult time for the industry, but the evidence indicates that consumers benefit from a good deal of competition and choice within this sector."

The pub industry has suffered in recent years from the introduction of the smoking ban, sharply lower consumer spending amid the recession and competition from supermarkets selling cheaper alcohol.