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Pub Guide

Leeds Arms - Eltisley

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Opening Times

Issue 141 Winter 2009-10

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PUB TRADE REFORM?

The Office of Fair Trading has announced that it is taking no action on anti-competitive practices in the UK pub market following CAMRA’s ‘super-complaint’ to the OFT in July. CAMRA had called for compulsory changes to pub leasing arrangements including a guest beer right, fair pub rents and reform of the beer tie to remove disadvantages to pub lessees.

In its response, the OFT claims that the beer tie does not cause significant detriment to consumers because there is sufficient competition in the market. CAMRA is responding by asking the government to overrule the OFT and refer the tie as operated by large pub companies to the Competition Commission.

And the parliamentary Business and Enterprise Select Committee, whose hard-hitting report on pub companies prompted CAMRA’s super-complaint, has announced that it will be reopening its enquiry following the OFT’s decision to take no action.

Earlier in October, following an internal pub industry mediation process, the British Beer and Pub Association announced that it was committed to reform of tied pub agreements, but mediation was widely reported to have failed and CAMRA responded with disappointment that the announcement had not addressed the issues in its ‘super-complaint’ or the earlier Commons Business and Enterprise Select Committee report.

But Punch Taverns and Enterprise Inns have responded by publicly agreeing to cease imposing restrictive covenants that prevent closed pubs from reopening as pubs. Following a letter from CAMRA they have also agreed to consider lifting existing covenants if asked to do so.

Meanwhile, the Government has launched a three-month consultation proposing the revocation of the Land Agreements Exclusion Order. This exempts land agreements such as the beer tie and restrictive covenants from the general ban on anti-competitive practices.

Revocation would boost the chances of CAMRA’s ‘super-complaint’ leading to reform and means a possible end to restrictive covenants. It would still allow companies with more that 500 pubs to operate the beer tie but they would have to show that they were not acting in an anti competitive manner. In reality this could mean acceptance of a guest beer right, commitments to sustainable rents and greater pass on of wholesale discounts.

CAMRA has announced that it will continue to campaign for revocation of the Order in addition to its appeal for a referral of the tie to the Competition Commission.

European Union rules that allow the UK beer tie are also under review. In its response to a consultation CAMRA supports the beer tie for small and regional brewers (because it ensures them access to markets) but calls for its removal for companies controlling more than 5% of the pubs in the UK pub market (around 2,700 pubs – this would remove the tie for Punch Taverns and Enterprise Inns).