Statutory Pubs Code to be introduced in Scotland
The Scottish government has announced legislation to improve the rights of tied pub tenants.
A new Scottish Pubs Code will enable tied pub tenants to sell one guest beer from a low-volume brewer or switch to a market rate lease, which would allow tenants to purchase products from any supplier.
If parliament approves next week, the new legislation will be effective from 7 October 2024, and provide some of the same protections that tenants in England and Wales have in place.
A statutory Pubs Code and a Pubs Code Adjudicator has been in place in England and Wales since July 2016 to address the disparity in negotiating power between individual tenants and the major pub groups.
Tied leases often mean tenants have to buy beer from the pub-owning business at a higher cost than on the open market.
“There will also be a mechanism, just as there is in England, to end up in a Market Rent Only (MRO) agreement where [tenants] can become free of tie,” Gavin Stevenson, the Scottish Licensed Trade Association's (SLTA) tied pubs policy adviser told Harpers.
The SLTA, which represents independent licensees, has long been a supporter of both the Tied Pubs (Scotland) Bill and a Scottish Pubs Code, claiming that many Scottish tied pub tenants have lost their livelihoods and savings as a result of “rapacious pubco behaviour”.
The Bill, put forward by Labour MSP Neil Bibby, was backed by a broad coalition including the SLTA, the Campaign for Real Ale (Camra), GMB Scotland, the Federation of Small Businesses, the Scottish Tourism Alliance, the Pubs Advisory Service and many small brewers.
“For years, pub tenants in England and Wales have had greater rights in their dealings with big Pubcos and it is important that Scottish publicans will soon get new protections,” commented Labour MSP Neil Bibby.
“It speaks volumes that the PubCo lobby have used money from Scottish pub tenants to try and prevent the same Scottish pub tenants from getting new rights. That tells you everything you need to know.
“Instead of working constructively with small Scottish pub tenants to introduce a fairer system, they have been determined to delay and circumvent the new rights Parliament has given their tenants.
“Given the deliberate attempts by the Pubcos to thwart this legislation, the Scottish government must consider going forward all other avenues available to them in order to ensure fairness for tied pub tenants, and to bring a halt to the unfair practices of huge national and multinational pub companies,” Bibby concluded.
However, some groups believe the new legislation will further hamper the Scottish pub sector, which has faced an unprecedented number of closures in the past year.
In a statement, The Scottish Beer & Pub Association (SBPA) said: “The prospect of a code has already stifled investment into the leased and tenanted sector north of the border and unfortunately this news is unlikely to reverse that.
“In 2023, pubs in Scotland closed at twice the rate of England. The sector – which supports around 45,000 jobs – needs positive action from the government, not further unwanted, unevidenced and unwarranted interventions.
“We will work proactively with the Scottish Government to minimise the negative impacts and deliver a workable code, however, this will not be welcomed by the majority of pub owners, tenants and customers.”
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