New code to get a fair deal for pub tenants

The Government is introducing a new Code of Practice to ensure that pub tenants are treated fairly and are allowed to run their businesses as they wish.

The code will be enforced by an adjudicator with powers to fine large pub companies who abuse their powerful position. Ministers say the measures will save tenants £100m a year.

Under the proposals the Code will make sure that:

• pubs are fairly and lawfully treated by pub companies
• tied pubs are no worse off than free-of-tie pubs
• pub companies charge fair rents and beer prices, with the possibility of open market rent reviews
• tied pubs could have the option of a guest beer, picked independently, which could help the growth of small beer and ale manufacturers in the community.

Tenants who feel that they are being treated unfairly or that there has been a breach of the Code will be able to complain to the adjudicator who can investigate and arbitrate the dispute for them. The adjudicator will have the power to enforce the code and impose fines on pub companies if the breach is serious.

The code will apply to pub companies that own more than 500 premises. These companies account for nearly 90% of complaints received.

Business Secretary Vince Cable said: “”Pubs are small businesses under a great deal of pressure, many of which have had to close. Much of that pressure has come from the powerful pub companies and our plans are designed to rebalance this relationship.

“”These plans will do just that and could save pub tenants £100m per year by making sure that pub companies charge their tenants fair rents and beer prices.”

The proposals are now being put out to public consultation until 14 June. We shall keep clients informed of developments.

Please contact Nick Ginger if you would like more information about the issues raised in this article.