Page last updated at 23:22 GMT, Thursday, 4 March 2010

Pub industry reform on 'beer ties' called for by MPs

Pint of beer
Pub companies have been criticised for not passing on discounts to tenants

Laws could be introduced forcing pub firms to change practices blamed for stifling competition, MPs have warned.

In a follow-up to two earlier reports, the cross-party Business, Innovation and Skills Committee said it wanted to see "real reform" in the sector.

It wants "beer ties" - requiring tenant landlords to buy beer supplies only from owner firms - to be investigated.

The committee said it would give the industry until June next year to solve the problem before taking action.

It talked of a "serious imbalance in power between pub companies and lessees".

"The industry must be aware that this is its last opportunity for self-regulated reform," the MPs said.

"Should those problems persist beyond June 2011, we will not hesitate to recommend that legislation to provide statutory regulation be introduced."

The MPs said the relationship between pub companies and their tenants must be looked at by the next committee early in the next parliament.

Under the influence

The MPs also urged the Office of Fair Trading (OFT) to reconsider its ruling made in October last year that found no evidence that ties between pub companies and landlords were harming competition in the pub sector.

The complaint by Campaign for Real Ale (Camra) over so-called "beer ties" - landlords having to buy beer from pub owners - is currently subject to an appeal.

Pub firms have been criticised by some for using their strong position to impose high rents on landlords, and for failing to pass on the discounts they get on beer to their tenants.

For their part, pub companies argue they need to continue to influence the running of their pubs so they can make a profit.

The British Beer & Pub Association says its industry code of practice can address these concerns.

"We are determined to address the issues raised in the report head on, by raising standards and putting into practice the new Framework Industry Code," it said.

"Companies will apply both the letter and spirit of that code in their own individual company codes within the next few months.

"This will deliver greater transparency to prospective tenants and lessees, more information, training and a low-cost independent rent review panel for existing tenants and lessees."

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