Are beer drinkers choosing to stay at home to save money?

The powerful Commons trade and industry committee is investigating the rise of pub companies, known as "pubcos".

Fears that the way the companies sell beer forces up prices are among worries raised by small business groups.

On Tuesday, landlords claimed their rents were being pushed up unfairly. Critics of the companies say the tactics have put 45p on beer prices.

The two biggest pubcos, Enterprise Inns and Punch Taverns, own more than a quarter of Britain's pubs.

The MPs are examining whether curbs are needed.

45p too much?

The big pub companies emerged when the Conservative government in the late 1980s limited the number of pubs that the big breweries could own.

The idea was to make the pub market more competitive and diverse, but there are complaints that the laws have not achieved their objective.

The companies counter that they have refurbished pubs and developed new markets.

Critics say they offer people a low-cost way of getting into the pub business but then tenants stay only three years on average.

Richard Harvey, a landlord with a number of pubs, told the MPs about the tactics used by the companies to squeeze out more rent.

He said: "The argument from the pubcos is that the beer price is supplemented by lower rent than the standard rent on the high street.

"That may have been true in the past, but in the environment we are in now it is not the case.

"When your current rent is �32,000 a year and they want you to pay �38,000 a year in the future with no market reason for the increase, then that just shows arrogance from the pubcos."

The Federation of Small Businesses says hundreds of its group's members had complained about the power of the pubcos.

It points to problems called by the "beer tie" - the system which means pub tenants can only buy most of their beer from the pubco which owns their premises.

The companies buy beer almost at cost price but then sell it on to publicans at highly-inflated prices, argues the federation.

Rob Hayward, head of the British Beer and Pub Association, said ministers might have to take notice of whatever the MPs' recommended.

"All governments, because it's such a high profile industry, feel pressure to get involved in some way or another," the former Conservative MP told BBC Radio 4's Westminster Hour.

Key questions

Both British and European competition authorities have approved the way the pub companies operate.

But the share prices of Enterprise and Punch fell when the committee's inquiry was announced earlier this year.

Small brewers are also worried by the grip of the pub companies, saying their centralised distribution systems freeze out niche products.

The committee says it will look at the beer tie, as well as the link between the wholesale beer prices charged by pubcos and the rents they charge their tenants.

The way pubcos' set and increase their rents is another key area for their questioning.