Office of Fair Trading, a U.K. government department, said Thursday in response to the Campaign for Real Ale (CAMRA) super-complaint relating to the supply of beer in pubs, that having examined the issues raised in the super-complaint, it has not found evidence that supply ties are resulting in competition problems that are having an adverse impact on consumers.
MAIN FACTS:
-In its complaint, CAMRA raised concerns about the operation of exclusive purchasing obligations by pub-owning companies, which require lessees to purchase beer solely through their pub-owning company landlord.
-CAMRA stated that these so-called 'supply ties' protect pub-owning companies from competition, and lead to higher beer prices and less choice for consumers.
-CAMRA also raised other issues including the methods used by pub-owning companies for calculating rents.
-The OFT has found that there is generally effective competition between pubs and does not consider that supply ties contribute to higher prices or prevent pubs offering a wide choice to consumers.
-The OFT has received submissions from pub lessees outlining their concerns about the rent assessment process and their negotiations with pub landlords.
-Although the OFT acknowledges the concerns of these lessees, the objective of the OFT's work is to ensure that effective competition delivers value and choice to consumers.
-The OFT considers that the issues raised in the super-complaint do not warrant further assessment by the OFT, and will be taking no further action.
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; +44 (0)20 7842 9296; ian.walker@dowjones.com