The Federation of Small Businesses (FSB) has called on the Office of Fair Trading (OFT) to re-evaluate the tied pub system amid complaints that licensees are struggling to pay for their rent and beer.

The FSB has asked the director general of fair trading to investigate the practice of beer-tie - a supply arrangement that obliges publicans under lease or tenancy agreements to buy most or all of their beer from the company that owns the pub.

The OFT last reviewed the pub tenants sector in December 2000, when the director general assured that the OFT would continue to monitor the situation. But a spokesman for FSB said the situation was getting worse and the livelihoods of pub tenants were under threat: 'We want the OFT to look at the anti-competitive behaviour taking place in this sector. Around 4,500 of our members are publicans and many are finding it impossible to make ends meet. The OFT need to conduct a thorough investigation into the industry.'

Under the currently system, tied publicans buy beer from the pubcos in return for a reduction in rent. Pubcos say the system offers a relatively cheap means of self-employment, but the FSB questioned whether this trade-off really happens in practice. 'Tied tenants get a raw deal. Not only do they have to buy their beer exclusively through one company, but they also face the daunting prospect that their rents will never go down and will only ever go up,' said Chairman of the FSB, John Walker. Details: +44 (0)20 7592 8113