A trigger event is something that has a significant impact of the expected trade of a tied pub, but the PCA has already confirmed the coronavirus pandemic itself cannot be a trigger.
The Government closure applied to all pubs in England and Wales and therefore, the PCA said, failed one of the trigger event conditions. However, impacts created by the coronavirus crisis on pub trade could provide trigger opportunities and the PCA has set out the conditions required by publishing a new Factsheet.
A key condition is tenants must be able to demonstrate the trigger event will decrease trade for the next 12 months.
Analysis needed
PCA Fiona Dickie urged operators to conduct solid analysis before making a claim, and to seek proper advice: “It is important tied tenants who consider there is evidence that they may have had a trigger event seek professional advice on this pubs code right and with the preparation of the relevant analysis.
"I have liaised with both the British Institute of Innkeeping (BII), which through its marketplace, provides access to professionals including accountants; and with the Association of Licensed Trade Accountants, to ensure that their members are familiar with the trigger event provisions in the code.
“Tenants should serve a relevant analysis only if they are satisfied it shows a trigger event has occurred that meets all of the conditions in the pubs code. For example, if Covid-19 has affected seasonal trade, but trade out of season will not be affected, this would not meet the condition of a decrease in expected trade in each of the next 12 months.
“The PCA can provide information on the pubs code and its processes, but cannot advise whether a trigger event has occurred in a particular scenario. This will be a matter of fact in each case.
“Tenants are therefore strongly advised to seek independent advice from a qualified professional when considering and preparing a relevant analysis. Please see here for information about getting professional advice on your pubs code rights.”
Professional advice key
David Jones, chairman of the Association of Licensed Trade Accountants, added: “The recent PCA’s initiative is to make publicans aware should they not expect for trade to continue as well because of a particular local source customer base for example a permanent factory closure then a process exists to approach the pub landlord to make new rental arrangements.
“It is essential appropriate professional advice is sought and as the term ‘accountants’ is not a protected term anyone can provide accountancy advice and services. It is vital that support with a PCA initiative is both by accountants who have long standing knowledge in dealing with the pub trade and who are qualified by one of their Professional Accountancy Bodies in the UK. Such qualifications ensure that the qualified accountant is subject to their bodies’ disciplinary procedure and has the appropriate trade experience.”