Heineken's Punch takeover not a blanket MRO trigger

By Liam Coleman contact

- Last updated on GMT

Takeover: the Punch board will meet on Friday to discuss Heineken's bid
Takeover: the Punch board will meet on Friday to discuss Heineken's bid

Related tags: Public house

Heineken’s proposed deal to buy 1,900 Punch pubs will not act as an immediate blanket trigger for all the tenants to be able to request the market-rent-only (MRO) option, according to a letter from the pubs code adjudicator's (PCA) office.

Chris Lindesay from the Punch Tenant Network has, in recent weeks, written to the office of PCA, Paul Newby, demanding clarification on whether the proposed takeover would be an MRO trigger and if it will have any effect on the pub's stocking rights.

The Morning Advertiser​ (MA​) has seen a letter from the PCA’s office addressing these concerns, ruling out a class-action situation for all tenants and stating MRO trigger events would only be "considered on a case-by-case basis".

The letter to the Punch Tenant Network added: "We cannot speculate whether a future potential change of ownership may lead to a change in arrangements that meets the conditions for a trigger event in respect of one or more pubs.

"While we understand that the desire for certainty might seem to come from dealing with a 'class action', any trigger can only be considered on a case-by-case basis where such an event has actually occurred, as each case turns on its own facts.

"In the first instance, this would be by the tied pub tenant identifying that the effect of the identified event is to decrease the level of trade that is reasonably expected to be achieved in each month over a continuous period of 12 months for their pub."

PCA refusing to speculate

Newby's office seemed similarly reluctant to be drawn on the issue of stocking rights.

The letter read: "Just as above, the PCA cannot engage in speculating whether a future change of ownership engages requirements in relation to stocking and how that affects any particular tied pub tenant.

"It is in the public domain that one pub-owning business​ has sent a pre-action letter to the Secretary of State for Business, Energy & Industrial Strategy (BEIS) in respect of regulation 31(2)(c) of the pubs code in connection with stocking requirements. It would not be appropriate for the PCA to comment further at this stage."


The Punch Tenant Network has described the letter as "unsatisfactory".

Lindesay said: "I am struggling to make out what it means beyond an unwillingness to speculate on things proposed but not yet happened. This is wholly unsatisfactory."

Decision day on Friday

The Punch board meets on Friday​ (10 February) to discuss the Heineken-Patron bid and it is then likely to be scrutinised by the Competition Commission, as it will lead to almost 3,000 UK sites being owned by the Dutch brewer.

However, the industry is already preparing for the prospect of the takeover going through. The Society of Independent Brewers (SIBA) has welcomed​ Heineken's announcement that if the acquisition is successful, the company will continue to work with SIBA to ensure Punch licensees have access to beers from many of Britain’s independent craft breweries via its Beerflex scheme.

Related topics: Legislation, Punch Pubs & Co

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