Government urged to introduce Pubs Code ASAP

Claire Dodd

Claire Dodd

10 November 2015

Trade bodies are calling on the Government to act swiftly in introducing its controversial Pubs Code, amid concerns that uncertainty in the market is preventing investment.

The calls come just over a week after the Department for Business, Innovation & Skills (BIS) published its latest consultation on the code. The new draft has divided opinions across the industry for its seeming reversal on several key points.

Under the latest draft pub companies would only have to offer a market rent option (MRO) to their licensees if increasing rent at a review. The option for a parallel rent assessment (PRA) has also been removed. The PRA was intended to ensure tenants on tied rent are no worse off than if they were free-of-tie. However it was seen as too costly and complex to implement.

While some licensee bodies have reacted angrily to the news, industry groups representing pub operators have welcomed the changes made in the latest version of the code, but called for its speedy implementation.

Association of Licensed Multiple Retailers (ALMR) chief executive Kate Nicholls said: 'Swift implementation of the code by the Government to ensure continued stability for the sector is now vital. Pubs and bars need a sense of clarity in order to continue driving growth and investment across local economies.'

Brigid Simmonds, chief executive of the BBPA, welcomes some of the recent amendments to the bill, which will form part of the Small Business, Enterprise and Employment Act 2015. She said: 'Parallel rent assessments were a key concern of ours, and we welcome the proposal to remove these. It was always our view that they would be too costly and complex, as there are very limited ready comparators to the tied model. The MRO option in itself is more than sufficient for anyone wanting to see a safeguard. We had also urged the insertion of an "MRO waiver", which the Government has also taken up. This is another positive step.'

'Over £200 million in capital is invested by BBPA members in their leased and tenanted pub estates, each year. It is essential that this investment continues, and it makes good sense that there is flexibility because not all investments will achieve pay-back within five years.'

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