'Tied' Beer Prices
More than half of the pubs in the UK are run under 'tie' arrangements which prevent pub landlords buying beer and other products on the open market meaning many pub landlords are forced to pay over the odds by around 50 pence a pint.

The 'tied' model works best when it is a true partnership, where the risks and benefits are shared equally between pub owning company and the pub landlord. Unfortunately, this is not the current reality. Pub-owning companies are able to earn excessive profits by increasing the cost of beer to their 'tied' pub landlords who have no choice but to accept high prices and pass them onto the consumer. 

This practice has led to higher prices in pubs and has widened the gap between pub and supermarket prices encouraging people to shun the pub for their armchair.

Pub landlords should not be denied access to the information and assumptions used to calculate a rent figure. An independent and affordable rent dispute system is urgently needed to avoid pub landlords being forced into agreeing excessive rents because they cannot afford to contest it.

The rent charged to 'tied' pub landlords must fully take into account the financial penalty they face as a result of being unable to purchase beer and other products on the open market. The current system is seriously flawed and is leading to higher prices in pubs and contributing to the high rate of pub closures.

This alone would boost consumer choice and have the impact of driving down pub beer prices through competition.

The Way Forward 
In parallel to its 'super-complaint' CAMRA, along with the Fair Pint Campaign and the Federation of Small Businesses, are participating in efforts to achieve an industry-wide mediated settlement to overcome the current unfairness of the 'beer tie' and pub rents.

If mediation is successful then it is possible the OFT would decide to use its powers to make the outcome of the mediation legally binding as an alternative to further action including reference to the Competition Commission for a lengthy market investigation. 

Our 'super-complaint' will give the OFT the opportunity to take swift action to ensure the 'beer tie' works fairly in future.

Clearly there are a number of reasons why Britain's pubs are under pressure, not least the recession and our punitive beer tax regime, but the evidence is clear that the 'tie' must be reformed if these valuable small businesses are to survive and thrive.

 In response to the BEC report, some companies have taken some positive steps to improve matters and we welcome that progress, but legally-binding reform is still required to ensure a fair deal for consumers.

The 'tie' is a restrictive agreement, but it should work through countervailing benefits for pub landlords to enable them to run a viable and sustainable pub providing good value and quality to their customers.

With increasing pub prices, failing pub businesses and unprecedented pub closures, the model is faltering and must be reformed as a matter of urgency.