Beer - supply of beer in UK pubs

Name of complainant: The Campaign for Real Ale

Date of complaint: 24 July 2009

Subject of complaint:

The super-complaint referred in particular to the existence of 'serious market failures which create the wrong incentives for market participants' within the beer and pub market. The key issues that the Campaign for Real Ale (CAMRA) recommended that the OFT investigates further were:

• the foreclosure of tied outlets to suppliers unable to access these outlets directly 
• the wholesale prices paid by tied pubs for beer and other tied drinks and the level of rent paid by tied lessees 
• the basis upon which rents for pub lessees are calculated 
• barriers to entry at the retail level of the supply chain, particularly the use of restrictive covenants on the sale of premises by pub companies and the lack of free of tie premises available to prospective pub lessees, and 
• arrangements for the provision of technical services equipment ('TSE') and technical services ('TS') in pubs.

OFT response: 22 October 2009

Having examined the issues raised in the super-complaint, the OFT did not find evidence that supply ties are resulting in competition problems that are having a significant adverse impact on consumers.

Read the OFT's Response to CAMRA's supercomplaint October 2009 (pdf 644kb).

The OFT considered that the issues raised in the super-complaint did not warrant further assessment, and announced that it would be taking no further action.

Consultation: 5 February 2010

In February 2010, the OFT opened a consultation regarding its findings in response to the super-complaint.

Outcome of consultation and the OFT's final decision regarding CAMRA's super-complaint: 14 October 2010

The OFT has concluded that the pub sector in the UK is competitive overall and it has not found evidence of competition problems that are having a significant adverse impact on consumers. The OFT has therefore concluded that further OFT action by is not warranted.

The OFT has found that consumers are benefiting from considerable competition and choice between pubs. The OFT considers that in such market conditions, any strategy by a pub-owning company which compromises the competitive position of its lessees would not be sustainable, as this would be expected to result in sales and margin losses for the tied lessee and, in turn, for the pub company. The OFT also found that supply ties do not prevent pubs offering a wide choice to consumers, having found that pub-owning companies generally source beer from a considerable range of suppliers.

The OFT noted that it had 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 OFT found that given the degree of competition between pubs, it did not consider that issues relating to the negotiation process between pub companies and tied lessees or the assessment of rents can generally be expected to result in consumer detriment.

Download the OFT's final decision regarding CAMRA's super-complaint (pdf 1.2Kb).

Read press release OFT announces outcome of CAMRA super-complaint consultation (14 October 2010)

Key documents

• CAMRA's super-complaint July 2009 
• OFT press release CAMRA submits super-complaint to OFT 24 July 2009 
• OFT press release OFT publishes response to CAMRA super-complaint 22 October 2009 
• OFT's Response to CAMRA's super-complaint October 2009 (pdf 644kb)
• OFT press release 5 February 2010
• OFT press release OFT announces outcome of CAMRA super-complaint consultation (14 October 2010)
• OFT's final decision regarding CAMRA's super-complaint (October 2010) (pdf 1.2Kb)

Senior Responsible officers: Simon Williams (020 7211 8164, simon.williams@oft.gsi.gov.uk) and Ann Pope (020 7211 8786, ann.pope@oft.gsi.gov.uk)

Project Director: Geoffrey Steadman (020 7211 8810, geoffrey.steadman@oft.gsi.gov.uk)

Team Leader: Bethan Watts (020 7211 8564, bethan.watts@oft.gsi.gov.uk)

Back to: Super-complaints