Pandemic Shows True Merits Of Leased & Tenanted Pub Model Says BBPA

The British Beer & Pub Association (BBPA), has today submitted its response to the Consultation on proposals to amend the Pubs Code.

According to the trade association, whilst pubs across the nation have suffered during the pandemic, it has also demonstrated the strengths of the leased & tenanted model and in particular the partnership between the pub owning company and tenant or lessee.

It says this shows that the leased and tenanted model is working well and that at this time wholesale changes to the Code which could undermine the relationship between pub company and tenant or lessee would be unnecessary and obstructive.

Through the pandemic, pub-owning companies provided £285 million in reduced or cancelled rent to tenants who couldn’t trade because of lockdowns, or whose trade was reduced because of restrictions.

In the same period, these pub-owning businesses also provided additional support such as refunds on spoilt beer, COVID signage and PPE meaning on average their leased & tenanted pubs received £27,000 in support. That is support separate and distinct to that provided by the Government during the pandemic.

The BBPA says the support given to leased and tenanted pubs during the pandemic shows that the model is working well and is a true partnership, where risk and reward is shared between tenant & lessee and pub company, but where a pub company will still give significant support to a tenant or lessee to help them run and grow their business.

In comparison, independent pubs and those leased from commercial landlords would generally not have had access to anywhere near the same level of support during the pandemic. Likewise, as widely reported, the casual dining sector did not receive rent cancellations or reductions from institutional landlords like those given by pub owning businesses.

Although the BBPA does not believe wholesale changes should be made to the Code currently, it does believe small changes could be made to improve operational elements of the Code and address anomalies with the original drafting.

In particular, in response to the consultation, it has called for a longer negotiating period on MRO agreements before referrals to arbitration to avoid unnecessary costs for both pub owners and tenants & lessees and further delays. For these same reasons, it does not support proposals for Parallel Rent Assessments which it argues would create confusion and add extra unnecessary burdens for Pub owning businesses whilst not delivering any meaningful benefit to prospective tenants.

A British Beer & Pub Association spokesperson said: “The pandemic has shown the true merits of the leased and tenanted pub model.

“The partnership between tenant or lessee and pub owning business has never been stronger. The value and support received on a tie agreement has really come into its own during Covid. It is vital that the Pubs Code supports the long term viability of the model.

“This consultation provides an opportunity to improve some technical and operational aspects of the Code, whilst also reducing unnecessary costs and delays for all parties.”