New Pubs Code consultation launched

Claire Dodd

Claire Dodd

29 October 2015

The Department for Business, Innovation and Skills (BIS) has today published a new short consultation on the Pubs Code and adjudicator.

The Government is seeking views on the market rent only option and rent assessments. Following responses, draft regulations will be put before both Houses of Parliament for debate. A second consultation is due to open shortly.

The controversial Pubs Code and adjudicator outlines the policy that the Small Business, Enterprise and Employment Act 2015 will put in place. According to BIS, the legislation aims to ensure that tied pub tenants should be no worse off than if they were free of tie. The Code will apply to all businesses in England and Wales that own 500 or more tied pubs, however it will not govern relationships between businesses and their managed or free-of-tie tenants. Tied pub tenants will be able to request to pay rent calculated by market rent and go free of tie, under the plans.

A previous Government consultation on the issue in 2013 received 1,100 responses from all parts of the industry, and 7,000 responses to an online survey run in parallel. The Government response to this consultation was published in 2014, ahead of the introduction of the act to Parliament.

Trade bodies have today welcomed the new consultation. Association of Licensed Multiple Retailers (ALMR) chief executive Kate Nicholls said: 'This has been a polarising debate and the ALMR has continually emphasised a pragmatic and moderate approach.

'We have been working closely with BIS over the summer to ensure a workable solution for businesses and to secure investment across the sector, from both landlords and other sources, to secure funding for lessee investment and will continue to make the case in these consultations.

'Following this we hope that Government will set out the details of the Code implementation in a timely fashion to provide the sector with some degree of certainty going forward, particularly for those going ahead with rent reviews.'

British Beer & Pub Association (BBPA) chief executive Brigid Simmonds, commented: 'There is a large amount of detail to be studied in these proposals, but I do welcome that the Government appears not to be proceeding with parallel rent assessments, which we always argued strongly would be too costly and complex to operate.

'We also welcome proposals to allow for an MRO waiver in return for a significant capital investment. Over £200 million is invested by BBPA members in their leased and tenanted pub estates, each year. It is essential that this investment continues.

'We will be responding in detail as we do need to work very closely with Department of Business, Innovation & Skills, and tenants’ representatives to make the legislation work in practice.'

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