Tied tenants of pubcos owning more than 500 pubs including Punch, Enterprise, Greene King, Admiral, Star and Marston’s now have the legal right to the market rent only option.
This gives around 12,000 tenants new rights and protections such as increased transparency about the tied deals available, a fair rent assessment and the right to move to a free-of-tie tenancy in certain circumstances.
The introduction will come as a relief to campaign groups including the British Pub Confederation and Fair Deal for Your Local, who have fought for the rights of tied tenants for a decade.
And the introduction will also come as a relief to pubcos, after the code was delayed due to reported drafting errors from the Department for Business Innovation and Skills, which potentially cost hundreds of tenants the MRO option.
Alex Frear, chairman of the Guild of Master Victuallers, said: “While there is still much work to be done to ensure the healthy future of our trade, the fruition of years of lobbying has given us firm foundations to bring about much needed change for our trade.
“It is a proud moment for all those involved in bringing the various trade bodies together, consolidating years of campaigning for this essential legislation.”
Chair of the British Pub Confederation, Greg Mulholland MP, said the group will monitor the code’s effectiveness to ensure pubcos do not ‘circumvent’ the code and the MRO option.
“The Government and the pubs code adjudicator's office must monitor this and take action where necessary,” he said.
“This is a historic change that over time will tackle the chronic abuse of the beer tie that has been at the heart of the tied pubco model and done so much damage to so many pubs.”
The first ever pubs code adjudicator, Paul Newby, who has been subjected to intense scrutiny due allegations of a conflict of interest, oversees the operation of the code and will arbitrate disputes and investigate breaches. Tenants can visit the website of the Pubs Code Adjudicator to make a referral or to get free advice.
Business minister Margot James said: “The pubs code will improve relationships across the industry and help tied tenants get a fairer deal. I want to take this opportunity to urge all tenants and pub companies to work with the pubs code adjudicator, as well as one another, to do what’s best for Britain’s pubs.
“Paul Newby is the right person to oversee the Code. He knows the challenges pubs are facing and is committed to providing a fair and robust service.
“I’d also like to pay tribute to the hard work Anna Soubry and the team put in to make sure we have a code that protects tenants' rights.”
Ahead of the Code coming into force, Paul Newby has produced guidance for all parties on how to adopt the code and what to do when disputes arise.
End to doubt
The Association of Licensed Multiple Retailers welcomed end to a period of doubt for publicans.
Chief executive Kate Nicholls said: “It is important for the sector to push forward and ensure that work with the adjudicator runs as smoothly as possible and that the office of the adjudicator hits the ground running to ensure compliance.
“The ALMR will continue to work closely with its members to ensure that they are fully up-to-speed with the code and aware of their obligations, opportunities and responsibilities.”
Inez Ward, Justice for Licensees, added: "We are hopeful that, finally, we will see a much fairer and just balance in the relationships between pubco and tenant.
“The pubcos must learn that the bad practice that we have been unfortunate enough to witness will not be tolerated, this is a new dawn."