Thursday, 14 October 2010

The OFT Decision On Pubs Is A Big Blow To The Consumer

It was maybe a bit much to ask that the Office of Fair Trading (OFT) would defend the consumer against big business.  That doesn't seem to be the way consumer protection works.

The fact that big business is generally favoured over the consumer was  illustrated by the OFT's judgement about the 'beer tie' today.  CAMRA launched a 'super complaint' to the OFT that serious competition failings in the UK pub market were leading to higher prices, reduced amenity and pub closures.  The OFT, unsurprisingly, ruled against the CAMRA complaint.

The OFT was shown a great deal of evidence that the pub industry was becoming anti-competitive in a way that adversely affected the consumer.  The 'beer tie' imposed by the big pub companies means that tied landlords pay , on average, £20,000 a year more for their beer than landlords in no tied premises.  The power of the big pub companies means that the number of landlords not in tied premises are falling.  This means that real competition is dwindling and consumers are suffering because of this.

The OFT has, of course, decided to ignore the impact upon consumers.  In doing so, it is ignoring its fundamental duty.

If the beer tie issue and its effect upon consumers and the pub trade is not properly addressed, small breweries will be adversely affected, diversity and competition in the pub trade will be increasingly diminished and the consumer will suffer.  The pub is a vital element of British community life.  It represents the beating heart of the local community.  Today's OFT decision is a victory for big business and homogeneity.  It is a defeat for the consumer, diversity and small breweries.

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