PCA Paul Newby found in favour of Edward Anderson, tenant of the Railway Inn in Gloucester, after he brought a case against landlord Marston’s.
Anderson, who has since gone free-of-tie following the finding, successfully argued that a rent assessment proposal (RAP) carried out by Marston’s was not compliant with the pubs code.
A central part of case centres around a failure to properly account for the amount of sediment in each cask, with the volume of beer part of the formula for setting rent.
The PCA did not take any regulatory action or fine Marston’s for breaching the code, and the pubco was not accused of lying about sediment levels in beer.
However, the adjudicator did find Marston’s at fault on a number of points, with the discrepancy showing the company “has not properly applied its mind to this issue”.
The PCA said: “Whether intentionally or not initially, I find that I agree with the claimant that the respondent acted in breach of this specific code requirement.”
Anderson has since told MCA he is considering his legal options in regards to compensation for the overpayments in beer and rent.
A Marston’s spokesman told MCA: “Any subsequent actions that Anderson wishes to take should be done so through the appropriate channels as the PCA has stated that this matter is closed, and we have received no formal contact to the contrary.”
The Pubs Advisory Service, which campaigned for the introduction of the pubs code, and advises pubco tenants, has suggested the case could be the pub trade’s ‘PPI scandal’, and predicted a potential wave of compensation claims.
However Marston’s insisted there were no wider significance following the finding.
The spokesman added: “Sediment in beer and operational wastage are just two of many factors that are taken into consideration when negotiating a pub tenant’s rent. Wastage has always been accounted for in public house rent assessments. There are no consequences or ramification across the industry as a whole arising from this particular award.
“Mr Anderson has recently entered into two MRO (market-rent-only option) deals and the PCA has confirmed the matter is closed.”
The British Beer & Pub Association (BBPA) said it had been working with the PCA to make guidelines on beer wastage and sediment allowances “clearer and more transparent”.
“That guidance is now in place and all the regulated pub companies are committed to following it,” a spokesman said.