Pubs Code Regulations
Why should the Pubs Advisory Service (PAS) represent your business?
PAS has a proven track record of representing and advocating for pub business owners and operators, addressing the various forms of inequality that exist within the industry.
PAS was established with a mission to provide independent and high-quality advice and support to pub business owners and operators, enabling them to grow and develop their businesses. PAS has been involved in the Pubs Code etc. Regulations 2016 legislation from the beginning and has represented numerous pub tenants at arbitration.
Pub business owners and operators often find themselves at a disadvantage in commercial relationships, particularly when dealing with landlords and their representatives. This can leave them without the necessary support and representation they need. At PAS, we understand the importance of addressing inequality in all areas of the industry, including the Pubs Code and in business rates matters.
The Pubs Code Regulations 2016 were created to protect tied pub tenants, ensuring they have greater choice and fairer lease terms. If you lease a pub from a regulated landlord (one that owns 500 or more tied pubs), you have legal rights under the Pubs Code, including the ability to request a Market Rent Only (MRO) lease at key trigger points.
Switching to an MRO lease allows you to break free from product and service ties. This gives you greater flexibility, better supplier options, and potentially lower costs, which can help you run a more profitable and independent business.
Why the Pubs Code Matters
Equality & Transparency
The Pubs Code ensures that tied tenants are not at a disadvantage compared to those who operate free-of-tie pubs. It establishes clear guidelines for rental terms, product ties, and dispute resolution, promoting transparency in an industry where deals have historically varied greatly.
Statutory Rights at Trigger Points
Tenants gain the legal right to consider an MRO lease during key events like rent reviews or lease renewals. This option provides greater flexibility to assess which arrangement best supports your business, whether that’s remaining tied or converting to an MRO.
Formal Dispute Resolution
The Pubs Code Adjudicator (PCA) is central to resolving disputes. If you and your landlord can’t agree on an MRO proposal or any other aspect of the tied arrangement, you have the right to refer the matter for arbitration, which helps ensure a fair outcome.
Key Principles of the Pubs Code
- Fairness for Tied Tenants: You should be no worse off than if you were leasing a free-of-tie pub. This principle underpins rent assessments, product pricing, and other contractual terms.
- MRO Lease Option: At the time of a rent review or lease renewal, you can request an MRO proposal from your landlord. This option removes the tied requirement, allowing you to source products independently and potentially negotiate more competitive supply deals.
- Robust Arbitration Process: If disagreements arise over MRO lease terms, the PCA provides a structured arbitration process designed to resolve disputes quickly and fairly.
- Transparency & Information Sharing: Pub-owning businesses are legally obligated to share relevant information—including rent assessments, underlying business assumptions, and comparable pub data—so that you can make informed decisions.
Trigger Point Occurs
This typically happens at a rent review or lease renewal. Your pub company may propose new terms, giving you the legal right to explore an MRO alternative.
Formal Request & Proposal
You issue a formal MRO notice to your landlord. The landlord must then provide an MRO proposal that complies with the code, detailing proposed rents, durations, and other key terms.
Evaluating Tied vs. MRO
You compare the proposed tied terms with an MRO lease. An MRO arrangement can offer greater operational control, but it may come with a different rent level. A careful financial analysis is crucial.
Negotiation & Possible Arbitration
If you and your landlord can’t agree on the MRO proposal, you can refer the matter to the Pubs Code Adjudicator. Arbitration involves both parties presenting evidence, leading to a legally binding resolution.
Implementation or Exit
If the arbitration or negotiation is successful, you move forward under the agreed-upon terms. If you decide the proposed terms don’t serve your business goals, you retain the option to remain tied or potentially assign your lease to another party.
Initiate a Case Review
Before going ahead with any Pubs Code referral we recommend having an initial consultation to ensure that we can provide the necessary assistance. We will cross reference your situaiton with other cases on our database. Our initial consultation is £80.00 and done in order to assess how strong your case is, we like to give an honest opinion upfront and you are under no obligation to continue with our services.