Industry campaigners blast PCA's pubs code clarification as 'unhelpful'

Simon Clarke of campaign group Fair Pint said PCA Paul Newby's bulletin newsletter, published this week, simply reiterated what “we knew already” and did not “clarify issues”.

The bulletin pointed out that premises are not tied just because the tenancy or licence contains a stocking requirement. 

“A stocking requirement is defined in the Small Business Enterprise and Employment Act 2015," it stated. "This is a term that relates to either beer and/or cider produced by the landlord (or a group undertaking) and does not require the tenant to buy that beer or cider from a particular supplier, nor prevent that tenant from selling beer or cider produced by another (whether or not it restricts such sales)."

The document also stipulates that pub tenants could refer a market-rent-only (MRO) option proposal to the PCA for arbitration if they considered the proposal not to be MRO-compliant. 

“If a tenant considers the stocking requirement to be unreasonable, they can refer the case for arbitration. The arbitrator will consider whether it is unreasonable on a case-by-case basis,” it said. 

'No right to a stocking requirement'​

However, Clarke insisted the wording simply “repeated what’s in the code”.

“It would be more helpful had they said that there is no right to a stocking requirement inferred in the act or the code,” he said. “Both the tenants and the brewer pub company need to be aware that the legislation doesn’t actually confer a right to insert a stocking requirement.” 

The Pubs Advisory Service (PAS) also blasted the publication claiming that tenants and brewers required clarification on the law but neither could get it, which effectively rendered them "stuck".

Ruling must be clear​

“The trade is on hold while we await somebody at the PCA to read the law and tell us what it says,” Chris Wright said. “The law either gives you the right to stock or it doesn’t. It’s binary. There is either an act that allows a brewer to impose a stocking requirement or there isn’t. The case-by-case basis is irrelevant.” 

Fellow PAS campaigner Dave Mountford added: “What we wanted was somebody with a legal background who would have made that strong statement of definition. He’s not doing it because what we’ve got instead is a glorified estate agent.” 

A PCA spokesperson said: “We’ve clarified the position on tied pub tenants being able to refer stocking requirements they believe to be unreasonable to the PCA for arbitration. It will be judged on a case-by-case basis.” 

Elsewhere, the PCA's bulletin also set out timescales for MRO cases as follows: 

• If a tied pub tenant wishes to exercise their right to request a MRO option, the MRO notice must be received by their pub-owning business within 21 days of a MRO event (one of which is receipt of a rent assessment proposal).
• The pub-owning business must provide a full response within 28 days, starting from the day they receive a MRO notice from the tenant. When the tenant receives the full response this triggers the 56-day negotiation period.
• The tenant has a 14-day window to refer the proposal for arbitration. This starts the day after the end of the 28-day period that the pub-owning group has to provide its full response. A second 14-day window may also be triggered if the tenant receives a subsequent proposal from the pub-owning business during the negotiations. Where that is the case, the 14-day window to refer a subsequent proposed tenancy starts the day after the tenant receives that subsequent proposal.
• If the matter goes to arbitration, the 56-day negotiation period under the pubs code is effectively put on hold (although the PCA encourages continued discussion between the parties). One of the following occurs depending upon the outcome of the arbitration:

1. If the arbitrator rules that no failure has occurred with the response, that response is deemed to have been received by the tenant on that day. The 56-day negotiation therefore commences on this date
2. If the arbitrator rules that a revised response must be provided then the pub-owning business has 21 days to provide that full response (or by the day specified in the arbitrator’s ruling)