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Business News

Miliband wades into battle over 'beer tie'

David Miliband fancies himself as an unlikely saviour of the pub: the Labour leadership candidate's campaign now includes proposals to "save British pubs" and the MP has launched a stinging attack on the controversial "beer tie".

On his website, Mr Miliband said: "One of the biggest problems facing pubs is the 'tie' – forcing some pub landlords to buy their beer and other services solely from the pub companies ('pubcos') they rent from. This means many of them pay over the odds, which reduces their profitability and increases prices for drinkers."

The controversy over the tie is not new. The Campaign for Real Ale has been pushing for reform of the tie since the mid-1980s, claiming it leads to the big pubcos, such as Punch Taverns and Enterprise Inns, inflating the price of beer by up to 50p a pint at tenanted and leased pubs.

A Camra spokesman yesterday said: "It is not just about price, it is about quality, pubs closing and the inability of pubs to stock local beers." Six pubs are closing a day, he said, and "many of these are tied pubs".

Last October, however, the Office of Fair Trading found "no evidence" that the beer tie was resulting in competition problems, following a "super complaint" submitted by Camra three months previously. Camra appealed against this decision in December and the OFT agreed to reopen its inquiry into the tenanted pub market in February. It is due to publish its final views next month.

Meanwhile, Camra says that Vince Cable, the Business Secretary, and Ed Davey, the Consumer minister, have given a commitment to hold the pubcos to a deadline of June 2011 to improve treatment of licensees.

As for Mr Miliband, some publicans complain that despite his "save the British pub" measures, the last Government's hikes in beer duty and red tape were as damaging as the tie.