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OFT re-opens inquiry into UK pubs market

Issued: Friday February 5th 2010

Status: For immediate use

CAMRA, the Campaign for Real Ale, has reached agreement with the Office of Fair Trading (OFT) to stay its appeal to the Competition Appeal Tribunal challenging the OFT’s initial response to CAMRA’s super-complaint in October 2009. CAMRA’s appeal is now stayed until Sunday August 1st 2010 to enable the OFT to consider further evidence of anti-competitive behaviour by the large pub owning companies. The OFT will now conduct an open public consultation before reaching a final decision.

CAMRA’s super-complaint argued that anti-competitive practices are inflating pub beer prices by around 50 pence a pint, restricting consumer choice and leading to chronic underinvestment in the nation’s pubs.
 
Mike Benner, CAMRA Chief Executive, said:

‘We are delighted that the OFT has responded to our appeal by agreeing to conduct an open consultation and I encourage all parties to use this opportunity to submit further evidence of anti-competitive practice. The consultation will lead to a new and final decision from the OFT. We are hopeful that on re-examination of the pubs market the OFT will decide to act against anti-competitive behaviour in order to deliver a fair deal for consumers. CAMRA looks forward to working with the OFT to deliver reform of the beer tie so that the pub market works in the interests of consumers.’

CAMRA’s fundraising appeal for the reform of the beer tie, which raised over £8,000 since January, will be suspended during the consultation period. The funds will be put towards CAMRA’s legal fees. CAMRA reserves the right to re-activate its appeal should it be dissatisfied with the OFT’s final decision following the consultation.


CAMRA, the Campaign for Real Ale, has welcomed the Government's decision to revoke the Land Agreements Exclusion Order 2004. The consumer group has been campaigning for its revocation since last summer as part of its campaign to reform the beer tie to address a lack of competition in the pub sector in order to deliver a fair deal to the pub goer. Large pub operating companies, principally those with 500 or more pubs, will now need to work to prove that their beer tie agreements are fully compliant with competition law.

Currently tied landlords are unable to buy beer from brewers of their own choice and are forced to pay prices inflated by around 50 pence a pint. The Government consultation response states that revocation of the Order will promote fairer and more open markets and a better deal for consumers through improved prices, wider choice, greater investment and higher standards of customer service.

Mike Benner, Chief Executive, said:

‘This is very positive news for pub-goers, small brewers and struggling lessees. The Order is an anomaly which has for too long given legal cover to companies which are party to potentially anti-competitive agreements. The large pub owning companies will now have to review their existing beer tie arrangements in the full knowledge that they will be liable to severe penalties if it is subsequently proven that they have breached Competition Law.

‘CAMRA remains supportive of the beer tie model provided that it offers a fair share of benefits to consumers through greater choice, price competition and quality. We now urge the large pub owning companies to publicly commit to delivering on the ba sic principle that a tied tenant should be no worse off than they would be if free of tie.’

END

Notes to editors-

Following CAMRA's super complaint, 'A Fair Share for the Consumer', last July, the Office of Fair Trading decided in October to take no further action regarding competition in the UK pubs market. CAMRA is currently appealing the OFT decision through the Competition Appeal Tribunal.


CAMRA, the Campaign for Real Ale, has announced it will issue a legal challenge to the Office of Fair Trading’s decision to reject its super-complaint on anti-competitive practices in the UK pub market. CAMRA is pledging funds to the appeal, but is depending on consumers helping to raise further funds to ensure this vital legal challenge can stand the best chance of success.

In October the consumer group criticised the Office of Fair Trading (OFT) for failing to protect consumers by taking no further action to address consumer detriment in the pub market following CAMRA’s super-complaint submitted in July.

Under the Enterprise Act 2002, CAMRA is entitled to appeal the OFT’s decision to the Competition Appeals Tribunal, and has decided upon this course of action to continue fighting anti-competitive practices in the UK pub market.

From Tuesday January 5th 2010, CAMRA is calling upon consumers to visit the CAMRA website (www.camra.org.uk) and contribute to the ‘Consumers v. OFT Pub Market Ruling’ Campaign Fund.

Mike Benner, CAMRA Chief Executive, said:

‘CAMRA has taken the decision to appeal due to the inability of the OFT to deal with the problems affecting the UK pub sector.

‘CAMRA’s super-complaint to the OFT was based on securing a fair deal for the pub-goer, and building a sustainable future for Britain ’s pubs. However, we believe the OFT did not take reasonable steps to understand the pub sector, and more generally why over 50 pubs are closing per week across the UK .

‘We’ve seen the consumer watchdog scrutinised in previous years with the success of the Association of Convenience Stores’ appeal in 2005 in overturning the OFT’s decision at Tribunal. Pending the success of our appeal, CAMRA remains optimistic of Government intervention or a referral to the Competition Commission for a full investigation into the UK pub market.’

Bob Young, a former member of the Monopolies and Mergers Commission and respected Principal of Europe Economics, has said the OFT’s response was “as inadequate as CAMRA’s super-complaint was compelling. The OFT has not seriously considered whether there is fair competition at a local level which ensures that consumers, or pub landlords for that matter, get the best deal.  This is a critical shortcoming in the OFT's response to CAMRA."

Mike Benner concluded:

‘We now urge consumers and associated trade bodies to get behind our ‘Consumers v. OFT Pub Market Ruling’ Campaign Fund in the New Year and support our appeal.’


CAMRA has today written to the Chancellor asking him to end the special treatment of spirits in order to fund a reduction in beer duty and a zero rate of duty for beers 2.8% abv or below and to help compensate for the forthcoming increase in VAT. Following last year’s Pre-Budget Report excise duty on beer, wine and cider was increased by 8% whilst spirits were let off lightly with a rise of only 4%.

Mike Benner, Chief Executive of CAMRA, said

‘ UK beer duty has been increased by 52% since the current Government came to power in 1997 whilst spirit duty has increased by only 19%. The 4% duty concession given to the spirits lobby following last year’s Pre-Budget Report should be withdrawn to fund a fair deal for beer and pubs. In the longer term, the difference in the duty rate for spirits and lower alcohol categories should be restored to the levels that Labour inherited when they came to power in 1997.

‘The money generated from reversing the special treatment of spirits should be used to scrap duty on low strength beers and to reduce the main rate of excise duty on beer. Unlike spirits, beer is the mainstay product of community pubs which simply cannot afford further price increases. Community pubs provide a safe and social environment for people to relax with a drink and play a major role in community life. Community pubs should not be made to suffer as a result of unfair rises in beer duty, while spirits get off lightly.

‘Any reductions in beer duty must be fully passed on by pub owning companies to their tied publicans and therefore the consumer. Government should make it clear that it will stamp down hard on profiteering, through new competition legislation if necessary.

‘There is a common misconception in the UK that spirits are synonymous with whisky. In fact, whisky accounts for only about 10% of spirit sales in the UK; with alcopops and white spirits (vodka, white rum and gin) making up the lion’s share of sales in pubs.’

CAMRA, the Campaign for Real Ale, has announced the four finalists which will fight it out to be named ‘Best Pub in Britain ’.


CAMRA’s National Pub of the Year competition has been running throughout 2009. CAMRA members assess thousands of pubs across the UK , scoring on various aspects which make a great pub, including the welcome, service, atmosphere, customer mix (i.e. 18-80 year olds), décor and, of course, the quality of the real ale.

The four CAMRA National Pub of the Year 2009 finalists are-

Royal Oak Inn, Wantage, Oxon , OX12 8DF
Tel. 01235 763129, www.royaloakwantage.co.uk

Pub description from Good Beer Guide 2010-

'Photographs of ships bearing the pub's name adorn the walls in this street-corner pub. The lounge bar features a wrought-iron trelliswork, largely hidden by over 300 pump clips. The smaller public bar attracts a younger crowd. A mecca for the discerning drinker, the pub is a primary outlet for Pitstop and West Berks ales in the area- two beers carry the landlord's name.'

Paul Hexter, Royal Oak landlord, said:

‘We are thrilled to be in the final. I’ve been promoting real ale for the 26 years I’ve been at the  Royal Oak, and having won the Regional award twice before, it’s great to reach the National final. Our regulars are really thrilled for us, and to celebrate we are cracking open a few aged bottled beers!’

Crown Hotel, Worthington , Gtr Manchester , WN1 2XF
Tel. 0800 068 6678, www.thecrownatworthington.co.uk

Pub description from Good Beer Guide 2010-

'Local CAMRA Pub of the Year 2006 and 2008, this country inn offers seven cask beers and acts as the brewery tap for Prospect beers. High quality home-cooked food is served in the bar and conservatory restaurant, while a large decked sun terrace at the rear has patio heaters for cooler evenings. Mini beer festivals are held about four times a year.'

Daniel Prince, Crown Hotel licensee, said:

‘We are really pleased with this achievement and it’s a real boost for everyone at the pub, and for the beer drinking folk in Wigan . It puts everyone in a good mood, and it helps us to raise our game. With a lot of hard work we’ve turned this pub around from what it was a few years ago. Selling good beer is good business.’

Royal Oak , Friday Street, West Sussex , RH12 4QA
Tel. 01293 871393, www.theroyaloakrusper.co.uk

Pub description from Good Beer Guide 2010-

'A lovely, isolated, low-beamed, narrow free house that is well worth finding, with seven handpumps for real ale, three for cider and two for perry. Ales are usually from local micro-breweries and are constantly changing. CAMRA National Pub of the Year Runner-Up in 2009. This is a real gem.'

Sarah Blunden, Royal Oak landlady, said:

‘We are very proud to be in the running for the title again. I do feel, however, that I accept these awards on behalf of all the locals who regularly use this pub. Our pub is about people as well as beer and I think we have the best of both.’

Kelham Island Tavern, Sheffield, South Yorkshire , S3 8RW
Tel. 0114 272 2482, www.kelhamislandtavern.co.uk

Pub description from Good Beer Guide 2010-

'Selected as CAMRA's National Pub of the Year in 2008 after previously picking up many local and regional awards, this small gem was rescued from dereliction as recently as 2002. An impressive 10 permanent handpumps include two that always dispense a mild and a stout/porter, so you are sure to find something to suit your mood. In the warmer months you can relax in the pub's multi-award winning beer garden.'

Trevor Wraith, Kelham Island Tavern licensee, said:

‘Since winning the National award last year, we have been working to the same pattern, always keeping the beer of a consistent quality. It’s marvellous to be in the final again this year, and we will be sticking to our formula, which involves keeping our staff well-informed and passionate about their beer.’ 

Julian Hough, CAMRA Pubs Director, said:

‘This is a really strong year for the competition, with four outstanding community pubs vying for the National title. These pubs have got to the final after being judged on their quality many times throughout the year by CAMRA branch members and regional directors. It’s going to be very difficult to decide on an overall winner, as I know each finalist brings great pleasure to a lot of people, not least within their respective local communities.’

The winner of the CAMRA National Pub of the Year 2009 is to be announced in mid-February 2010.


K.L.Wells

Pubs / Press & Publicity Officer

If you have any Press & Publicity information or stories please contact our Press & Publicity Officer by email or call his mobile (07778) 289643.

 

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