PCA responds to latest warnings over pubs code effectiveness

Responses from annual compliance reports from the pubcos between 2016 to 2018 were analysed by the adjudicator's office. Pubcos must show their compliance with obligations under the code and report any breaches raised or alleged by tied tenants.

Newby said tenants reported “significant barriers to exercising their market-rent-only (MRO) option in a timely and straightforward fashion”.

Common issues ​

The PCA said common issues pubcos reported were the small number of MRO tenancies agreed, the high number of tenancies “subject to forfeiture, seizure or abandonment” and the use of legal notices to oppose the renewal of tied tenancies on existing terms.

It will examine instances of pubcos issuing notices under section 25 of the Landlord and Tenant Act (LTA) 1954 to oppose a new tenancy being granted to an existing tied pub tenant for evidence of links between tenants requesting MRO and LTA proceedings to take possession.

Rules on pre-entry information, training and business plans will be analysed for effectiveness in supporting new tied tenants.

Meetings between the PCA and pubco chiefs will take place in October to understand the reasons for a high rate of tenant departures.

Recipients of a MRO proposal will be asked their experiences of the process and its outcome in a questionnaire issued through pubcos next month. Another survey launched in the new year will collect tied tenants’ experiences of the code.

Significant barriers

Newby said: “The information submitted by the pub companies and the monthly MRO data being published by them confirm the picture suggested by earlier PCA research. It is a picture of tied pub tenants experiencing what they perceive to be significant barriers to exercising their MRO option in a timely and straightforward fashion.

“I have written to the pub companies and this will be focus of the next round of bi-lateral meetings with each CEO in October. I want to get behind these figures and know what is driving the high rate of tenant departures, including the extent to which tenant churn may be preventing them from exercising their rights under the code.

“Additionally, all tied pub tenants who have received a MRO proposal will shortly be asked to complete a PCA questionnaire setting out their experiences of the MRO process and its outcome.

"I will use this information and the responses from the pub companies to target further interventions to secure tenants’ access to MRO.”

This follows news​ the adjudicator was urged to publish evidence of suggested progress, by a tied tenant.

Gary Murphy, of the Ye Olde Mitre Inne in Barnet, north London, said the process was not working “on any level”, after a 15-month wait for a decision on his own case.

Tom Astley, intelligence and compliance manager at the PCA, said: “I want to encourage people from all areas of the industry to speak to us about their experiences with the code."

He said his mantra is ‘we don’t know what we don’t know’ and that the PCA are relying on the industry to come to us and speak to us.

Data published by the British Beer & Pub Association (BBPA) shows responses from pubcos to MRO applications and their outcomes.

Some 668 full responses to MRO notices have been issued since the code’s introduction in August 2016. There have been 53 new MRO tenancies agreed by new agreement and 26 new tied tenancies agreed following MRO negotiations.

The six pubcos covered are Admiral Taverns, Ei Group, Greene King, Marston’s, Punch and Star Pubs & Bars.