The Scottish Government has announced action to improve the rights of tied pub tenants.
The Bill will ensure that tied tenants have the option to request a “market-rent-only” (MRO) lease. This means that a tenant can pay the going market rate to rent the pub without having to buy products or services from the pub-owning business, therefore ending the tied relationship. Even if a tenant remains tied, the Bill provides an opportunity to sell guest beers. They will not be restricted to only selling the brand of the pub-owning business.
Ministers will lay secondary legislation in Parliament next week which, if accepted, would see the Code come into force on 7 October 2024, and will be overseen by an adjudicator.
Ministers expect the legislation will deliver a fairer tied pubs sector, with risks and rewards being more equally shared between tenants and their landlords. In 2023, it was estimated that there were just under 700 tied pubs in Scotland.
Small Business Minister Richard Lochhead said: “We need to do all we can to protect pubs, bars and licensed clubs in Scotland, which in 2022 supported 34,000 jobs throughout the country and play an important role in our communities.
“I am pleased that we are now free to introduce measures contained in the Tied Pubs Act and give tenants more freedom to choose the lease which best suits their needs and diversify the number of products they can sell.
“It’s in everyone’s interest that the sector prospers and I look forward to working with tenants, pub-owning businesses and the new Scottish Pubs Code Adjudicator to deliver these important changes
Welcoming the announcement, CAMRA’s Scotland Director Stuart McMahon said: “Today’s announcement that the Scottish Government recognise the importance of protecting pubs, the role they play in our communities and are now introducing a new, legal Pubs Code for Scotland, is fantastic news for licensees and pubgoers.
“As well as making sure tied tenants can earn a decent living, the new Pubs Code looks set to make it easier for tied tenants to sell more locally brewed beers, increasing choice at the bar for customers o tasty and distinctive products from small, local and independent breweries – particularly cask ale.
“These new protections in law are vital so tied tenants can make a long-term success of their pubs and shape the unique character of their businesses to become an integral part of their community. This requires a balanced relationship between licensees and pub companies, preventing any unfair practices like pub companies taking more than is fair or sustainable from tied licensees’ profits – or making it harder to sell a range of locally-brewed products.
“This fair deal for tied pub tenants to protect pubs at the heart of communities can only be achieved by a robust and long-overdue statutory Scottish Pubs Code and the new Pubs Code Adjudicator to enforce it.”
