Pubs and publicans play a crucial role at the heart of our local communities, providing a place to come together and socialise, and they make an important contribution to the economy.
Tied pubs are an integral part of this story, having existed since the early 18th Century. But there are very real concerns about the unfairness which can arise in the relationship between pub owning companies and their tied tenants.
We consulted on ways to address these problems and you have responded in your thousands. I’d like to thank you for sharing your views, opinions and personal experiences with us.
On the strength of all the evidence we have received, the Government is taking action to make sure that tied tenants get a fair deal.
A Statutory Code and Adjudicator
We will introduce a new Statutory Code for all tied tenants, enforced by an independent Adjudicator, to make sure that they are treated fairly and are no worse off than their free-of-tie counterparts.
It will give them increased transparency, the right to request a rent review if they have not had one in five years, and the right to take disputes to the independent Adjudicator.
The Adjudicator will enforce the Code, arbitrate disputes, carry out investigations into alleged breaches and impose sanctions on companies who fail to comply.
For tenants tied to a pub owning company with 500 or more tied pubs, the protection of an additional Enhanced Code will require their pub owning company to provide them with a parallel free-of-tie rent assessment on request if rent negotiations for their pub fail.
Many of you called for a Mandatory Free of Tie (or Market Rent Only) option. Whilst this appears to be a simple solution, it carries huge uncertainties for the industry, with a real risk of widespread pub closures. We have therefore decided not to include this provision, or a guest beer requirement, in the Code.
What this means for tenants
For the first time, we are giving tenants at risk of unfair treatment the tools to get a fairer deal underpinned by an independent Adjudicator. Those companies who behave reasonably have nothing to fear, but tied tenants can expect fairer treatment and to be no worse off than their free-of-tie counterparts.
We are committed to supporting a healthy and flourishing pub industry – that’s why we scrapped the beer duty escalator and cut beer duty for the second time this year.
Now tied tenants can enjoy the benefits of the thriving sector which they work so hard to keep at the heart of our communities.