Drinkers lose out as pubs cleared

DRINKERS will be sobbing into their pints today after the pub and brewery industry was cleared of breaking competition laws.

The Trade and Industry Select Committee ruled that no one pub company or brewery held a dominant market position.

Pub tenants had argued that they were being forced to hike beer prices because their pub company landlords forced them into exclusive stock buying contacts.

Tenants argued they were charged above the market rate for the alcohol under the 'beer tie' contracts.

Landlords say drinkers are paying up to 45p too much for a pint as a handful of giant firms carve up the market.

The committee said that if the ties were removed the landlords would cover lost revenue through increased rents.

Chairman of the committee Martin O'Neill said: 'On reviewing the market, we found that no one pubco or brewer held a dominant position in their respective markets and concluded that there were no competition issues in these sectors which required the attention of the Office of Fair Trading at this time.'

The Campaign for Real Ale described the inquiry as a 'whitewash' that failed to understand the issues involved.

Its concerns were echoed by the Federation of Small Businesses, which had asked for the inquiry on behalf of tenants.

It said in a statement: 'Today's report makes a number of welcome recommendations but the committee has underestimated both the scale of the problems licensees face and their fundamental cause.

'It is the relationship itself that is flawed rather than a minority of individual contracts.'

There are currently seven large pubcos in the UK. The largest two, Enterprise and Punch Taverns, have more than 8,000 pubs each.

The companies were created after national brewers were forced to sell thousands of their pubs from the end of the 1980s in an attempt to generate greater competition.

However, the committee was concerned over the control breweries had on the distribution of beer, largely through the contracts between breweries and pub companies.

It said breaking the link between brewer and distributor could allow new entrants into the market.

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