The Pubs Code came into force on the 21 July 2016, giving tenants more rights and greater protection when dealing with large pub companies that own tied pubs.
Tied tenants are obliged to buy beer and other drinks from their landlords. All businesses owning 500 or more tied pubs in England and Wales are now covered by the new code.
This gives around 12,000 tenants new rights and protections such as increased transparency about the tied deals available, a fair rent assessment and the right to move to a free-of-tie tenancy in certain circumstances.
Since April 2020, the new Pubs Code Adjudicator is Fiona Dickie. She oversees the operation of the code and will arbitrate disputes and investigate breaches of the code.
The British Institute of Innkeeping together with the Association of Licensed Multiple Retailers (now UKHospitality) and the Federation of Licensed Victuallers Association have produced a Question and Answer Sheet which can be downloaded here. In addition the Pubs Code Adjudicator's office has produced clear guidance for all parties on how to adopt the code and what to do when disputes arise which can be viewed at the Pub Adjudicator's Website.
Simply put, the MRO option means that tenants of large pub companies can opt to change to a free-of-tie lease and removes the obligation for all the products sold on site to be bought directly from the landlord pub company or their agreed supplier.
Tenants - remember to ask for your copy of the Compliance Record and Declaration when you request MRO.
The PCA has published statutory advice setting out the minimum steps that pub companies should take to ensure compliance with the Pubs Code every time they prepare a free-of-tie Market Rent Only (MRO) proposal.
The PCA strongly recommends that tenants ask their pub company for a copy of this compliance record and declaration when they make their MRO request. Not only will explain why particular terms have been offered, but it can also be used, if necessary, in conjunction with the initial three-month stay in arbitration proceedings already made available by the PCA as an invaluable negotiating tool to reach an agreed outcome.
More information can be found here.
If you have already been through the MRO process, tell the PCA your experience by completing this short questionnaire.”
If you are a BII member with any queries about MRO, call the BII Helpdesk on 01276 684449.
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