Greene King sent the pubs code adjudicator (PCA) a questioning letter in May about an advice note the industry watchdog published in March, which offered advice to tied tenants and pub-owning businesses to ensure their market-rent only (MRO) option proposals complied with the code.
However, brewer and pub operator Greene King queried the legality of the note and called for it to be withdrawn.
A 14-day deadline was set by Greene King in its letter to the PCA, but this had passed and the operator announced it would escalate the situation by submitting a judicial review claim, which it did on 14 June.
Above the law? Pubcos v PCA
Greene King's application to the High Court for a judicial review was refused, yet the pubco intended to pursue the matter. However, it has since decided not to take things further.
A spokesperson for Greene King said in a statement today (15 October): “Our support for the Pubs Code has never wavered since its inception, but we were surprised at the publication of the MRO advice in March.
“We felt compelled to take action to provide clarity for our business and our partners, but had to follow the set legal process laid out by Parliament to challenge the advice note.”
The statement continued: “However, since we first challenged the note, discussions between the adjudicator and the pub companies have been more productive, including the waiving of confidentiality rights by the pub companies, so the potential impact of our challenge has lessened.”
Elements of the Pubs Code still remain dissatisfactory to Greene King, which the pubco would like to see improved, the spokesperson added.
Tied leased and tenanted agreements
Greene King is now prioritising the upcoming statutory review of the code, which it feels will provide a stronger platform to “stress the benefits” of tied leased and tenanted agreements.
In a statement to The Morning Advertiser the PCA said it welcomed the High Court's refusal for Greene King to apply for a judicial review.
Adjudicator Paul Newby said: "Fiona Dickie [deputy PCA] and I continue to expect that the industry will full[y] take account of the regulator's advice in making MRO-compliant proposals under the Code and supporting the fair and lawful dealing principle.
"Our focus is now to improve transparency and parity across the industry by publishing arbitration awards," he continued. "We are pleased that pub companies have given their consent to waive confidentiality and encourage tied tenants in arbitrations to be similarly supportive by providing their consent to publish. We expect the first awards to be published in the coming weeks."
PCA adjudicator Paul Newby said in August that he was continuing to gather evidence on the effectiveness of the pubs code, after a prior compliance report from the six big pubcos showed tenants faced “significant barriers”.