The statutory Pubs Code including the Market Rent Only option, introduced to tackle the exploitation of pub tenants by large pub companies, finally came into force today following a long campaign led by Liberal Democrat MP for Leeds North West and Chair of the Parliamentary Save the Pub Group, Greg Mulholland.
The Pubs Code regulates the conduct of the large 6 pubcos after years of complaints of unfair tied pricing and rents that caused many publicans to fail and led to the closure of many pubs. Now tied tenants of pubcos owning more than 500 pubs now have the legal right to take the Market Rent Only option, meaning they can have an independent assessment of the rent on a free of tie basis and choose to pay only that to their pubco, freeing them from excessive marked up tied price lists. Overall 12,000 tenants will now benefit from better rights and protection when dealing with their pub company.
Backed by ten leading organisations, Greg launched the Fair Deal for Your Local campaign in May 2013 to fight for the market rent only option and he coordinated the campaign nationally. The campaign called for reform of the tied pubco model operated by large pubcos and campaigned for for the Market Rent Only option to allow tenants to opt to pay only a ‘fair market’ dry rent and have the freedom to buy their own beers. The first success was persuading the Government to introduce a statutory code of practice, but the real breakthrough was in November 2014 when Greg masterminded a House of Commons victory, defeating a three-line Government whip. Campaigners named this “Mulholland’s Law” following Greg‘s long campaigning on the issue, with Otley-based Briscoe’s Brewery brewing a special celebratory beer called “Mulholland’s Law”.
After the Bill became law, the code had been due to come into force at the end of May 2016 but was delayed after drafting errors by the then Department for Business, Innovation and Skills, but it is now the law and operational as of yesterday, 21st July 2016 – now being referred to by campaigners as MRO Day!
Greg, who is also Chair of the British Pub Confederation, commented:
“I am delighted that the Pubs Code is at last the law, nearly two months late, but that it is now in place and operational. This is a historic day in the pub sector and one that many publicans and campaigner have fight long and hard for and I want to pay tribute to every tenant, pub-goer and Fair Deal for Your Local campaigner who has made this happen. It is a victory not only for pubs and publicans, but also for justice and people power.
“Pubs are at the heart of our communities and for too long many have had to put up with unfair and unscrupulous practices of the large pub companies. Too many pubs have been closed down and too many tied tenants have had to scrape a living. From now on, tied tenants of the big six pubcos will have the right to an independent rent assessment and the all-important Market Only Option at rent review or renewal. This is a historic change that over time will tackle the chronic abuse of the beer tie that has been at the heart of the tied pubco model and done so much damage to so many pubs.
“There are still some ways in which the pubcos will, even now, seek to circumvent the Code and the Market Rent Only option and so the Government and the Pubs Code Adjudicator’s office must monitor this and take action where necessary. The British Pub Confederation, whose members are the ones who have delivered this historic change, will now focus on monitoring how effectively the Code works and what can be improved, and looks forward to working closely with the newly created Department for Business, Energy and Industrial Strategy to do this.”
The Association of Licensed Multiple Retailers (ALMR) welcomed the introduction of the Statutory Code for Pubs, bringing an end to a period of doubt for licensed hospitality.
ALMR Chief Executive Kate Nicholls said: “We are happy that the Pubs Code is now in force, bringing an end to a period of uncertainty for the sector. It is important for the sector to push forward and ensure that work with the Adjudicator runs as smoothly as possible and that the Office of the Adjudicator hits the ground running to ensure compliance.
“The ALMR will continue to work closely with its members to ensure that they are fully up-to-speed with the Code and aware of their obligations, opportunities and responsibilities. We look forward to working closely with the Adjudicator to ensure that disputes are swiftly resolved.”
Tenants can submit an enquiry to the Office of the Adjudicator online: http://www.rohs.bis.gov.uk/pca-enquiry/