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Detail of outcome
We will introduce a Pubs Code to ensure 12,000 tied tenants of the 6 largest pub owning companies can secure a fair deal and a better livelihood.
The code provides:
- the right to consider a tied rent in parallel to a market rent only (MRO) offer
- protections in the event of a sale of a pub to a non-code company
- an exemption for pub franchise agreements from MRO and the regulations in the code for setting and negotiating of rent
- a deferral of the MRO option of up to 7 years in return for significant investment by the pub-owning business
A new independent adjudicator will enforce the code and have powers to arbitrate and award redress if a breach is found.
The draft regulations were laid before Parliament on 13 June 2016. View The Pubs Code etc. Regulations 2016 and The Pubs Code (Fees, Costs and Financial Penalties) Regulations 2016.
Detail of feedback received
We received 80 responses to the consultation. These mainly came from:
- pub companies and breweries with 500 or more pubs
- interest groups, trade bodies and other organisations
- tied tenants
We also had a few responses from former tied tenants and others in the industry.
We will be introducing a statutory Pubs Code to govern the relationship between businesses that own 500 or more tied pubs and their tied tenants. We will also introduce an independent adjudicator to enforce the code.
The Pubs Code is required as part of the Small Business, Enterprise and Employment Act 2015. The act means that the code must include a market rent only (MRO) option entitling tied tenants to be:
- offered (at certain trigger points) the opportunity to pay only a market rent for their pub
- free-of-tie for all products and services other than insurance
These measures will be introduced through secondary legislation.
We’re consulting on these measures in 2 parts. See part 2 of the consultation.
In this part we’re seeking your views on the MRO option including:
- disputes arising in relation to the MRO process
- the waiver from MRO in return for significant investment
- arrangements for rent assessments