Legal battle brewing over British ale

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Drinkers group Campaign for Real Ale (Camra) said it intends to mount a legal challenge to the decision by Britain's consumer regulator to reject its complaint over anti-competitive practices in the pubs industry.

The Office of Fair Trading gave the all-clear in October for leased pub operators to continue with the ``beer tie'' arrangement, which forces tenants to take beer supplies directly from their landlords.

``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 Chief Executive Mike Branner said.

``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.

Tenanted pubs are owned by companies but managed by publicans. The company charges rent and supplies the beer while its tenants run the business. 

Britain's two-biggest pub operators, Punch Taverns and Enterprise Inns, are both tenanted operators.

Camra's complaint had ``centred on the need to reform beer tie arrangements to prevent large companies exploiting tie arrangements that prevent tied publicans from buying beer on the open market at fair prices''.

However, the OFT said it had not found any evidence that supply ties were resulting in competition problems that affected consumers.

Because of Camra's status as a recognised consumer body, it was able to raise a ``super-complaint'' which the OFT was compelled to examine.

Camra is entitled to appeal the decision and has pledged funds to do so, but said it is depending on consumers to raise further funds to support the challenge.

Tenanted pubs have fared less well through the recession as they have tended not to be able to match the flexibility on pricing and promotions which company-managed pubs have. 

Managed pub operators have fared better as they are able to be flexible on pricing, leading to operators such as Wetherspoon offering pints of beer for as little as 99 pence ($NZ2.27).

- Reuters