Brewer and pub owner Greene King has been forced on to the defensive after a group of its own tenants threatened legal action against it.
The 91 tenants, based in Oxfordshire, claim they cannot compete with Greene King's managed pubs, which are able to buy beer from the company at much cheaper prices.
The tenants, who rent Greene King pubs and run them day-to-day, have hired law firm Maitland Walker to take their case to the Office of Fair Trading. They argue that the FTSE 250 company is breaking competition law and abusing a dominant market position in the region.
Rupert Croft, a partner at Maitland Walker, said he was confident the tenants had a case and that the firm would be contacting the OFT within the next month. "We want to submit a heavyweight document and are looking to instruct an economist. The tenants don't want to just a chuck a letter at the OFT. We want a proper argument that is grounded in hard data."
However, Greene King has now written to all its tenants, defending itself against the allegations and arguing its case.
As well as stating that it "totally rejects" the claims, the letter - from David Elliott, the managing director of Greene King's tenanted arm, Pub Partners - says: "Pub Partners' strategy is to provide the best tenants a low-cost entry into the pub industry and to ensure that both Greene King and its tenants can make a reasonable profit."
It continues: "We are proud of our record as being seen as one of the most supportive pub companies. We are always looking to improve our support package, however, and if any of our tenants or lessees are in any way unhappy, we would be more than happy to discuss their concerns with them."
An insider said the group had sent managers to visit tenants across the country and see if any complaints could be addressed. It was also pointed out that the action is being led on the tenants' behalf by Meeko Oates, who while still a publican, is no longer a Greene King tenant.Reuse content