Pubs Code Regulations 2016 - Consultation on removing the "beer tie"
In June 2014, the Department for Business, Innovation and Skills (BIS) announced the government's decision to create a statutory code of practice to govern the relationship between pub owning companies (those that own 500 or more tied pubs) and their tied tenants plus an independent adjudicator to monitor compliance with that code and decide disputes.
The Small Business, Enterprise and Employment Act 2015 contains provisions to implement this decision. During the course of the Parliamentary process, the Bill, as introduced, was amended in the House of Commons to include a new provision to require a large pub owning company to offer its tenants a "market rent only option" (MRO), without being bound by an obligation to buy from the landlord, or from a person nominated by the landlord, some or all of the alcohol to be sold at the premises. This means that the “beer tie” is removed.
On 29 October 2015, BIS published a first consultation on the draft Pubs Code Regulations 2016.
The Pubs Code is required to include a MRO option entitling tied tenants to be offered (at certain trigger points) the opportunity to pay only a market rent for their pub free-of-tie for all products and services other than insurance. BIS's consultation focuses on this MRO option, including proposed measures in relation to disputes arising in relation to the MRO procedure, and the waiver from MRO in return for significant investment; arrangements for rent assessments; and proposals on parallel rent assessments.
BIS invites comments by 14 December 2015. A second consultation, to be published in November 2015, will cover other issues, such as enforcement.
The first consultation can be viewed here
Posted on 11/04/2015 by Ortolan
