Legislation

Licensees’ fears over MRO option

By PMA

- Last updated on GMT

Licensees’ fears over MRO option

Related tags: Mro option, Landlord, Beer, Mro

Licensees from around the country offer their views on the market-rent only option - and what it could means for their pubs.

Alun Williams, Three Golden Cups, Southerndown

“In a short space of time, my pubco has had my property valued, sent down company surveyors to forensically inspect the pub and had the area manager continually hinting for me to surrender my lease in exchange for a short-term tenancy and small investment.

“This simply unsettles existing leaseholders and, in my case, raises the point of whether I should continue to invest in the pub. They spoke of unintended consequences; well I can see one of them is to frighten off good operators in pursuance of freeholds to be replaced with inexperienced cannon fodder, the need for them to fuel the churn once again with no threat of MRO (market rent-only option). New operators will be signing up for even less flexible deals.”

Ian Feeney-King, Cross Keys, Swansea

“I am on a 30-year lease with 15 years remaining, with a turnover exceeding £1m. I told my pubco I will be seeking the MRO option. We had a full and frank discussion but, to date, no one knows exactly what it will entail.

“They are not going to just give away all the profit they currently make. They are answerable to their shareholders. Without inward investment to sites, an awful lot of us will end up going to the wall. My pubco would love that. They would turn this site into a managed house in a heartbeat. So here we sit in limbo.

“They are not interested in buying my lease from me. They did offer that I surrender my current lease and give me a five-year tenancy on better terms. The offer was a joke. I was also told they will sell the site to a smaller company, rather than lose the current level of income they get, and will not sell the site to me. This is not what the changes in legislation were aimed at; it was aimed at licensees having a better and fairer deal.”

Carol Ross, Roscoe Head, Liverpool

“Most licensees need the MRO option in order to have any future in their pubs. The pubcos are doing their utmost to undermine MRO, in particular by abusing the 500-pub threshold with moves like the big recent sell-off (by Punch) to NewRiver Retail. This abuse is still continuing in a big way and cannot be allowed to carry on.

"Are they going to sell off more pubs next year when licensees can opt for MRO? The pubcos have done this to themselves. Please don’t let them destroy our heritage.”

Michael Tartt, Markham Arms, Chesterfield

“The Markham Arms is a good sized pub, but with a small client base. I am tied to draft, cask, bottled beers, lagers and ciders. If this new code comes into place I fear our pubco will find any way to get money out of us for any loss they incur.

"There will be less spent on maintenance, home rent will quadruple, and more things like that.”

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