Meagre MRO take up across major pubcos

By Liam Coleman contact

- Last updated on GMT

Low pick-up: only a handful of licensees have taken the MRO option
Low pick-up: only a handful of licensees have taken the MRO option

Related tags: Public house, Mro

Only eight licensees have taken up the market-rent-only (MRO) option across five of the six pubcos governed by the pubs code since it came into force in July 2016.

Figures from Ei Publican Partnerships, Marston’s, Punch Taverns, Star Pubs & Bars and Admiral Taverns show that despite the five companies owning more than 9,000 pubs between them, only eight licensees have successfully taken a free-of-tie MRO lease in the past 11 months.

MRO requests and MROs taken since the code came in

Ei – Four MROs taken out of 171 quote requests (as of 17 May)

Marston’s – Zero MROs taken out of six requests (as of 19 May)

Punch – Three MROs taken out of 90 requests (as of 4 May)

Star – Zero MROs taken, no quote data shared (as of 25 May)

Admiral – One MRO taken out of six requests (as of 18 May)

Greene King – No figures provided

The figures seen by The Morning Advertiser (MA)​ show that not a single licensee at Star Pubs & Bars or Marston’s has got MRO. Only one Admiral tenant has taken MRO, while three Punch licensees have taken the option and four Ei licensees have taken an MRO lease.

Four of the pubcos also revealed how many licensees had requested an MRO quote since July. Ei tenants made the most request at 171, while 90 Punch tenants, 6 Admiral tenants and six Marston’s tenants made an MRO quote request.

Greene King was the only pubco governed by the code that did not provide data on MROs. Greene King has said it will issue up-to-date figures in its preliminary financial results in June.

Rent doubled

An Ei licensee who has been attempting to go MRO for almost six months told The MA​ that the process was “very complicated” and off putting for licensees.

The operator, who wished to remain anonymous as talks are still ongoing around the MRO offer, which it was claimed was more than double their current rent.

“The Pubs Code Adjudicator (PCA) said it wasn't happy with my claim because I didn't make a 'legal argument' and suggested I employ a solicitor to write my statement of claim.

“This is supposed to be a low-cost process and I don't think that the average licensee has got that cash to spare,” the licensee said.

‘Limited desire’

Admiral Taverns has seen six licensees request an offer on an MRO lease since July and only one take up the final option on offer.

Andy Clifford, property and strategy director for the pubco, said that Admiral was seeing “very limited desire” from tenants for MRO.

“The tenanted pub model provides lower risk and lower cost opportunities for individuals to run their own businesses within their community,” he added.

More to the code than MRO

The MRO option was a key pillar of the pubs code when it came into force in July 2016.

Under the code, tied licensees have the right to request a quote on a free-of-tie lease, which would mean they would pay the market rent for the pub.

When asked if the low take-up was a surprise, a spokesperson for the PCA’s office said “the code isn’t just about MRO, it also gives greater protections to tied pub tenants on a range of matters”.

Related news

Show more