SHARES in pub groups nosedived yesterday after the commons Business and Enterprise Select Committee recommended the tenant tie-in system should be referred to the Competition Commission.<strong><br /></strong><br />The tie-in model prevents pub tenants from taking beer supplies from other companies. Shares in Enterprise Inns yesterday plummeted by 26.4 per cent, while Punch Taverns stock fell by 13 per cent and rival Marston’s declined by 7.8 per cent.<br /><br />The MPs’ report lambasted pub groups, criticising the serious imbalance of power within the model and said it can amount to “downright bullying” between the big so-called “pubcos”, such as Enterprise Inns and Punch Taverns, and their tenants. The MPs suggested the beer tie should be limited.<br /><br />Last month the British Beer Association said an average of 39 pubs closed every week last year, up from eight a week five years ago. A survey completed for the MPs showed that 67 per cent of tenants earn less than £15,000 a year.<br /><br />In addition MPs are demanding greater transparency over rent-setting procedures and an independent system for settling disputes. They also want tenants to have the opportunity to run their pubs free of the tie.<br /><br />But yesterday Enterprise Inns chief executive Ted Tuppen hit back and said: “We are confident any investigation will conclude that the principle of the tie continues to confer significant advantages for tied tenants.” Punch Taverns called for the government to reject the recommendation.