Scotland could follow England over pubs code implementation

By Nikkie Sutton

- Last updated on GMT

Landmark legislation: the pubs code came into force in England in July 2016
Landmark legislation: the pubs code came into force in England in July 2016
Scotland could be set to follow England in implementing the pubs code legislation, meaning thousands of pubs north of the border could go free of tie.

Public consultation for the bill, which closed yesterday (31 July) sought the views from all sides around how a pubs code​ could be formed in Scotland.

The answers will be analysed by members of the Scottish parliament to help inform the wording of a formal bill, which could then be voted on by members of Scottish parliament (MSPs).

The pubs code came into force in July last year, meaning that tied tenants of pubcos owning more than 500 pubs including Punch, Enterprise, Greene King, Admiral, Star and Marston’s have the legal right to take the market-rent-only (MRO) option.

The introduction came as a relief to trade campaign groups such as the British Pub Confederation and Fair Deal for Your Local, which had fought for the rights of tied tenants for a decade.

Labour MSP for West Scotland, Neil Bibby, has fought to establish a Scottish pubs code, in a bid to allow "greater protection and freedom for pub tenants".

He said: “Times have been tough for the pub trade as a whole but many tied pub tenants can encounter additional problems, from the high cost and limited selection of tied products, to contractual disputes with their pub company owners."

Restricting choice

He added: “All of this can leave tied pubs worse off than pubs that have no tied arrangement, hurting these hard-working small businesses and restricting choice for consumers.”

Scottish Licensed Trade Association (SLTA) chief executive Paul Waterson said: “If successful, this bill would lead to a landmark piece of legislation in Scotland that would safeguard the Scottish licensed trade for years to come.

"For too long, pubcos have been allowed to place their tenants in unworkable arrangements that prioritise shareholder interests."

He added: "The SLTA has advocated addressing the many problems caused by tied pubs for years and we fully support Neil Bibby’s bill that would undoubtedly protect Scottish pub tenants, consumers and producers. It is only fair that Scotland is afforded similar rights and safeguards to those that exist for England and Wales.”

However. commenting on Scottish Labour Leader Kezia Dugdale's support for Neil Bibby's members bill, Scottish Beer & Pub Association chief executive Brigid Simmonds said: “We welcome Mr Bibby’s interest in the industry but this bill would actually do the opposite of what he is setting-out to achieve.

“The pub market in Scotland is completely different to other parts of the UK, with only 17% of pubs under a tied arrangement here, compared to 40% in the UK as a whole. It simply doesn't work to compare like-for-like in this case. Furthermore, we have already put in place a system of self-regulation in Scotland which safeguards tenants. 

“Second, tied-pubs offer greater choice of beers than pubs free-of-tie; while tied-pubs average ten draught lines, free-of-tie pubs only offer eight and tied-pubs offer double the amount of cask ale."

Impact on small businesses

Simmonds also outlined how the bill will impact small business owners in Scotland if introduced.

She said: “Finally, the tied-pub models offers unrivaled entrepreneurship opportunities, jobs and investment. In the last two years alone £20 million has been spent by pub companies and brewers investing in pubs in Scotland.

“If successful, this bill will hurt small business owners, offer fewer choices for consumers and ultimately cost jobs."

She added: “We would therefore urge Scottish Labour to rethink their support for these ill-conceived plans and instead pressure the government into meaningful action to support Scotland’s pubs.”

Last month (July), pubs code adjudicator (PCA) office announced it had received more than 550 enquiries in its first year.

Of the 156 cases accepted, 131 related to MRO with the remaining 25 dealing with rent assessment proposals and market rents determined by independent assessors.

Meanwhile, the PCA office also raised a total levy of £1.5m in 2016-17​ from the six pubcos covered by the legislation.

Related topics: Beer, Legislation, Legal

Related news

Show more

Related products

This round is on us – and an iPad

This round is on us – and an iPad

William Reed Business Media | 27-Sep-2017 | Competition

Running your business should be effortless. You need to be able to rely on technology to keep your business up and running, so you can focus on bringing...

Understanding the soft drinks industry levy

Understanding the soft drinks industry levy

Britvic Soft Drinks | Recorded the 29-Jun-2017 | Webinar

What is the soft drinks industry levy - or so-called “sugar tax” - and what does it mean for your business?Join a special webinar presentation brought...