Pubs Code

Summary

The Pubs Code is a statutory framework introduced in the UK to regulate the relationship between pub companies and their tied tenants. 

What is the Pubs Code?

The Pubs Code aims to rebalance the relationship between pub companies and their tied tenants, giving tenants greater flexibility and choice while ensuring fair and lawful practices within the pub industry. By promoting transparency, accountability, and competition, the Code seeks to create a more level playing field for pub tenants and encourage a thriving and diverse pub sector.

Key requirements of the Pubs Code include giving tied tenants the right to request a market rent only (MRO) agreement, which allows them to rent their premises at market value without being obligated to purchase products exclusively from a specific supplier chosen by the pub company. Additionally, the Code sets out requirements for rent assessments, lease agreements, and the handling of conflicts between pub companies and their tenants.

Under the Pubs Code, pub companies are required to provide tenants with clear and accurate information about their rights and obligations, including details of available rent options and the process for requesting an MRO agreement. The Code also requires the appointment of a Pubs Code Adjudicator (PCA), an independent regulatory body responsible for overseeing compliance with the Code and solving conflicts between pub companies and their tenants.

Example of the Pubs Code in practice

In accordance with the Pubs Code, a tenant of a tied pub submits a request for an MRO agreement to their pub company, seeking to rent the premises at market value without being tied to purchasing products only from the company’s chosen suppliers. 

The pub company conducts a rent assessment and negotiation process with the tenant to determine fair terms for the MRO agreement. After coming to agreement, the tenant is given the freedom to source products from various suppliers, improving competition and choice within the pub industry while ensuring fair treatment for the tenant.