The Pubs Code
The Pubs Code gives tied pub tenants, who are required to buy products from their landlord, the right to leave this product tie and choose what products they stock themselves.
The Pubs Code is a set of mandatory regulations in England and Wales which tries to ensure pub tenants who are under contract to sell products provided by their landlord (tied tenants) are not worse off than if they were free to serve what they chose (free-of-tie tenants).
The code was developed partly due to concern that tied tenants were being unfairly treated by their landlords and had much less bargaining power when it came to lease negotiations.
The main provision of the Pubs Code allows tenants to request their landlord offer a “Market Rent Only” (MRO) option, which reflects what the tenant could rent the pub for, free-of-tie.
The code allows for the proposed rent to be looked at by an independent assessor, and for a Pubs Code Adjudicator to handle disputes and arbitration.
How well has the code been working?In October 2023 the government said it considered the code and the Adjudicator to be working well, citing positive views about the code collected by survey data and the relatively low level of dispute arbitration.
However, some industry figures have criticised the code arguing far more tenants would be going free-of-tie if the code gave them sufficient bargaining power and rights to do so. The Adjudicator has also been criticised historically for being too close to the industry.
During the 2024 Autumn Budget the government announced it would consult on ways to allow more pubs to serve guest beers from small brewers, which might involve changes to the Pubs Code.
The Scottish Pubs Code, which comes into effect in stages throughout 2025, allows a tied tenant to offer a guest beer from a small brewer along tied products from their landlord. It also allows tied tenants to request an MRO option at any time, with some minor exceptions.