Stocking rights clarification for MRO tenants
Following demands from Greene King for clarification on whether brewers that own pubs have a right for their products to be stocked, including threats of legal action, the government has confirmed that stocking requirements can be imposed on tenants that have taken on the MRO option.
The briefing sent to Greene King, which has now been made public, says: "A market rent only (‘MRO’) compliant tenancy can include a stocking requirement (if reasonable)."
As with most parts of the pubs code, the briefing comes with the caveat that stocking requirements can only be imposed in "reasonable circumstances". The document adds that "the Pubs Code does specify terms which are to be regarded as unreasonable but the list of terms specified is not exhaustive".
A BEIS spokesperson added: "We have written to Greene King to clarify the rules around requirements imposed on tenants to stock certain beers and ciders. The Pubs Code is a landmark piece of legislation and must work for both companies and tenants."
'Clear confirmation'
The briefing is applicable to tenants of not just Greene King, but all 'big six' companies governed by the pubs code, including Star Pubs & Bars. A spokesperson for Heineken, who operates Star Pubs & Bars, voiced the company's approval of the clarification.
"We welcome this clear confirmation from government that a brewer’s stocking requirement is an integral part of the 2015 Act and Pubs Code; and can be included in an MRO compliant agreement," they said.
Brigid Simmonds, chief executive of the British Beer & Pub Association (BBPA), also welcomed the clarification, saying: "It is very good to see the government state so clearly that an MRO-compliant agreement can include a stocking requirement, something on which we have always been very clear. This has always been a key part of the legislation, and certainly what pub customers would expect.
"Whilst this should settle the issue in principle, any individual cases will be up to the adjudicator to look at, and communicate any future decisions on to the wider industry."
