Pubs industry regulation to be examined by Business Committee

6 July 2022

Five years on from the creation of the Pubs Code, the Business, Energy and Industrial Strategy (BEIS) Committee questions industry leaders on how the system of regulation is working.

The Code was created in 2017 to govern the relationship between pub tenants and large ‘pubco’ landlords where the two parties have a ‘tied’ lease, meaning landlords take a portion of revenue from beer sales.

Disputes between tenants and landlords over how the Code should be applied are decided on by the Pubs Code Adjudicator, Fiona Dickie.

Purpose of session

The cross-party Committee question witnesses, including Ms Dickie, on how provisions in the Code have worked in practice compared to how they were envisaged by BEIS Department ministers.

In one example, the Code states that tenants can request to have their rent independently revaluated to be in line with local market rents – the Market Rent Option – and for a result to be provided within 90 days of the request. But the Committee has heard claims that the Code allows landlords to instead demand an arbitration process that can take two years, at added expense to the tenant.

Witnesses are questioned on criticisms that the industry has continued to be dominated by large pub companies. There have been claims of pub companies continuing to use the tied model to make prohibitive demands on tenants which the code was meant to prevent, such as demanding higher shares of revenue for sales of beer sourced from smaller brewers.

The Committee has also heard of cases in which tenants who request the Market Rent Option have been threatened with detrimental changes to their terms, such as their rent payments becoming quarterly with an advance payment.

The Committee questioned campaigners, industry bosses and Ms Dickie in order to understand the validity of these criticisms and whether improvements could be made to how the Code is administered.

Another recent issue involving the Pubs Code was the Adjudicator’s ruling that gaming machines can also be included in a tied tenancy agreement, meaning landlords can demand a share of takings from machines.

This evidence session comes after the BEIS Department launched an ongoing public consultation into how the Pubs Code and Adjudicator work. The Committee provided a submission to the Government’s consultation after hearing evidence from this session.

Witnesses

Tuesday 12 July 2022

Greg Mulholland, Chair, British Pub Confederation
Paul Crossman, Chair, Campaign for Pubs
Ian Cass, Forum of Private Business
Haley Tansey, Publican

From 11am

Mick Howard, Operations Director for the North, Star Pubs and Bars
Nick Light, Managing Director, Stonegate Pubs
Clive Chesser, CEO, Punch Pubs
Ed Hancock, Group Operations Director and Group Property Director, Marstons

From 11.45am

Fiona Dickie, Pubs Code Adjudicator
Alesha De Freitas, Deputy Director of Competition Policy, BEIS

Further information

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