How the pubs code is working in practice
An important milestone is that Ipsos Mori has now completed the field work for the pubs code adjudicator (PCA)’s 2022 survey. This involved a representative sample of 600 tied tenants across the regulated pub companies selected independently by the research company. Because of the pandemic this is the first survey for two years and I am eagerly awaiting the results. These should help me to better understand tenants’ experiences of the PCA and to compare each pub company’s compliance with the pubs code.
Meanwhile, the PCA team continues to make information about code rights more straightforward for tenants. A misunderstanding of them can clearly be a barrier to tenants.
Gaming machines
One code provision I have seen misunderstood relates to gaming machines, so it may be useful to explain my view on how it operates and the background for including it in the pubs code. I know some people understand the code to prohibit a tie on gaming machines. It does not. A tied tenant can choose to be tied for gaming machines, but when entering or renewing a tenancy they can decide not to have any gaming machines at all. The background to this provision may be of interest.
Before introducing the code, the Government consulted in 2013 on whether the gaming machine tie should be abolished, but having considered responses from across the industry it decided not to do so. Rather than abolish the machine tie, the Government said at that point it intended to include a provision in the pubs code that pub owning businesses may no longer oblige their tied tenants to source machines through them. Instead, the Government said tenants would be allowed to have the choice to be tied or not for gaming machines.
When enforcing the code, I must consider the wording of the gaming machine provision that was then made law in 2016. Regulation 47 of the code does not prohibit a gaming machine tie to the pub company. It provides that the pub company cannot require the tied tenant to purchase or rent gaming machines when entering or renewing a tenancy. The code therefore potentially gives the tenant the option to avoid having a gaming machine at all. But where the tenant does want machines installed, the pubs code does not restrict how the pub company imposes the tie in those circumstances.
Transparency is required around any such tie and the code requires the pub company to provide information about this to a new tenant. This information includes details of the terms of supply on which any gaming machines are offered to the tied pub under the tenancy. This is to include details of the arrangements for the distribution of income from the machines and an outline of the trading, payment, and credit terms in relation to them. The impact of a machine should be taken into account as part of the wider negotiation of a rent assessment and is therefore subject to the fair dealing provisions of the code.
PCA out and about
This column is a great way of getting the word out to the industry about the pubs code and about my work. There is a lot of information on my website too and we are working to improve this further. This month, as restrictions have now been lifted, my team is finally able to share information about the code in person. We will have a stand at Pub 22 from 21 to 23 March at the London ExCel, where I’ll also be speaking on 21 March at 1pm on the Vision Stage. Please come and hear more about the code and the work I am doing to protect tenants’ rights.
I am also making an effort to focus PCA outreach to promote understanding of Pubs Code rights outside of the South East. This is a direct result of research I did about recent tenant experiences of MRO (Market Rent Only), which revealed potential regional variations in tenants’ understanding and use of Code rights. The majority of the 50 respondents were from the South of England. Only 10 were from other areas with large cities and populations, such as the West Midlands, Yorkshire and the North West. Of the respondents who chose to go free of tie, all were from Greater London and the South East.
With that in mind, my team will be at the Northern Restaurant and Bar Show in Manchester Central from 15 to 16 March. On 16 March I’ll be hosting my own event called ‘Your Pub, Your Rights’ at the iconic Britain’s Protection pub in central Manchester, just outside the convention complex. Join me between 1 and 3pm and you’ll get to hear more about the pubs code in practice and the work I’m doing. My team will also be at the SIBA Beer X in Liverpool from 16 to 17 March.
Please take the opportunity to speak with me and my team at these events.
This column is intended to aid industry understanding about the pubs code and its impact. Nothing in it should be understood as a substitute for the pubs code legal framework.
