Great Britain. Parliament. House of Commons. Business and Enterprise Committee
Published: 2009
Total Pages: 92
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This report deals with the relationship between pub companies and their lessees. It is interested, specifically, in those companies which operate a tied estate, whose operations have frequently been criticised on the grounds that they are unfair to lessees who not only have to pay rent, but are also forced to buy beer at higher prices than those they could obtain elsewhere. Those who support the system maintain that the tie gives pubcos an incentive to support their lessees and that the revenue stream from the beer tie means that basic rents are lower than they would otherwise be. The Committee prepared a report in 2004 and put forward a number of recommendations and they were interested to see the extent to which those recommendations have been implemented. They found that many of the problems identified earlier remain and that the imbalance of bargaining power persists. There are strong indications that the existence of the tie pushes up prices not just to lesses but to consumers. However they are wary of simply recommending that it be abolished as that may simply put too much power to brewers and distributors. The OFT has declined to act in the past and the Committee recommends that the Secretary of State refer the matter to the Competition Commission for urgent investigation. Provisionally they feel that the tie should be severely limited.
