Tied Pubs Bill changes the fabric of Scottish pub landscape ‘forever’

'Utterly mystified': 'My fervent hope is that MSPs will vote, not on party lines, but in the genuine interest of their constituents, the hard-working pub tenants and the communities they serve'
'Utterly mystified': 'My fervent hope is that MSPs will vote, not on party lines, but in the genuine interest of their constituents, the hard-working pub tenants and the communities they serve'

Related tags Scotland Hawthorn leisure Legislation Tenanted + leased Pubco + head office

Today (23 March) is a date that will go down in history for all the wrong reasons.

Not least because it signalled the start of the first lockdown and a year that has devastated all our lives, leading to loss in so many forms, of lives, freedoms, livelihoods, time and opportunity.  

But for pubs in Scotland 23 March will likely be known for another sad reason. The day the fabric of Scottish pub landscape changes forever. 

The pub sector has been harder hit than most by the pandemic. 

Notwithstanding months of closures, in our collective efforts to thwart Covid-19, pubs have had to battle with disproportionate restrictions imposed on it by our government from curfews to alcohol bans. 

Despite the fact that we still face further restrictions ahead, it is not Covid-19 impact alone that leaves our sector worried and fearful. We are, after all, agile and have proven we can adapt quickly to the changing landscape that the pandemic brings. 

No, it is something far worse that we fear and that is the Tied Pubs (Scotland) Bill. 

‘Truly disappointed and utterly mystified’

Most people won’t have even heard of this Bill, brought forward by Neil Bibby MSP. 

His rationale for doing so is questionable given he has shown no interest in our sector before his sudden burning desire to stamp all over it. 

While the nation has focused, quite rightly, on the pandemic, our NHS and the vaccine rollout, Mr Bibby has been pushing forward a Bill in order to put his name in the legislative books, that will change the fabric of Scottish pubs for the worse, forever. 

I am truly disappointed and utterly mystified by his actions.  

Mr Bibby claims his Bill will protect the pub tenant from the pub company landlords by regulating their commercial partnership. And yet, the very same pub tenants it claims to be helping are calling out for it be halted.

Tenants representing 196 pubs, over a quarter of all 750 pubs impacted by the legislation have put pen to paper and written to the First Minister pleading for her to stop and listen to them. So far, to no avail. 

The Bill will be voted on today (23 March). This is despite the Economy and Fair Work Committee concluding in its report that there was no justification for the legislation. 

My fervent hope is that MSPs will vote, not on party lines, but in the genuine interest of their constituents, the hard-working pub tenants and the communities they serve. 

Concern for pub companies and tenants alike

The Tied Pub business model has existed for generations. In simple terms, a pub company who owns a pub leases it to a pub tenant who runs his or her own business. 

In return for investment in the pub, low-cost start-up costs and subsidised rent, the tenant purchases beer through the pub company.  

This partnership model means both parties share in the good times and bad, the risks and rewards. 

Take the last year as an example, tied pub tenants in Scotland have been supported with rent waivers to the tune of £6m, guidance on reopening with Covid secure measures in place and more intangible support focussed on the welfare of those tenants in these challenging times.  

For many this has been the lifeline that will enable those partners to reopen, as independent pub businesses around them close for good.   

Central to Mr Bibby’s Bill is the principal of MRO, Market Rent Only, which would allow for a pub tenant to enter into partnership one day, agree a reduced rent and purchasing agreement, accept hefty investment in the pub and the next month decide to switch to a commercial rent. The pub company is then left with the investment cost and no way of recouping it.  

Not surprisingly, this brings concern for pub companies and tenants alike. From a healthy partnership to what? Fear of investment and lack of trust. Is that what Mr Bibby really wants for our dynamic and entrepreneurial Scottish pub sector?    

This is all before the unintended and ill-thought through consequences for the commercial property sector, as it would effectively introduce security of tenure by the backdoor. It would also give tied pubs, which represent just 17% of pubs an advantage over other pubs in Scotland.   

Fundamental role for pubs and breweries 

Mr Bibby claims the Bill will mean pubs can choose to stock beers from the brewery down the road, supporting the local economy instead of from large multi-national brewers, Mr Bibby has consulted so few pub tenants in his research for this Bill, he simply isn’t aware it doesn’t work like that. 

The point of the tied partnership model is that tenants and landlords work in tandem together. After all, the greater sales, the better it is for both parties.   

Tied tenants already have the choice of beers from literally hundreds of breweries, locally or through SIBA (Society of Independent Brewers), and many say because of the collective buying power of their pub company, they simply couldn’t source them cheaper themselves. 

As I sit here, in week one as president of Scottish Beer and Pub Association, I am filled with a sense of pride for Scotland’s pubs and breweries. They are the very fabric of our society, communities and culture. 

I have no doubt, they will play a fundamental role in aiding Scotland’s recovery from Covid-19, through the 67,000 jobs they support, £950m in tax they contribute to the nation’s finances, communities they pull together, charities they support and downright fun they bring.   

Let’s hope our Parliamentarians don’t choose to destroy that when they vote today.  

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