The Scottish Government is taking action to improve the rights of
tied pub tenants across the country.
A new Scottish Pubs Code will enable eligible tied pub tenants to
sell a guest beer from brands that have small production levels
or switch to a market rate lease under which they could purchase
products from any supplier.
Ministers will lay secondary legislation in Parliament next week
which, if approved, would see the Code come into force on 7
October 2024. It will be overseen by an Adjudicator who is
expected to be appointed next month, subject to parliamentary
approval.
A tied lease involves tenants buying some or all of their alcohol
and other products and services from the pub-owning
business.
Ministers expect the legislation will deliver a fairer tied pubs
sector, with risks and rewards being more equally shared between
tenants and their landlords. In 2023, it was estimated that there
were just under 700 tied pubs in Scotland.
Small Business Minister said:
“We need to do all we can to protect pubs, bars and licensed
clubs in Scotland, which in 2022 supported 34,000 jobs throughout
the country and play an important role in our communities.
“I am pleased that we are now free to introduce measures
contained in the Tied Pubs Act and give tenants more freedom to
choose the lease which best suits their needs and diversify the
number of products they can sell.
“It's in everyone's interest that the sector prospers and I look
forward to working with tenants, pub-owning businesses and the
new Scottish Pubs Code Adjudicator to deliver these important
changes.”
Background
The Tied Pubs (Scotland) Bill 2021 was passed unanimously by
Parliament on 23 March 2021. The Tied Pubs Bill was brought
forward by Neil Bibby MSP and the Government agreed to support
the Bill during its passage through Parliament, subject to
amendments. The Bill became an Act on 5 May 2021.
The introduction of secondary legislation follows the conclusion
of unsuccessful legal challenges to the Tied Pubs (Scotland) Act
2021 - brought by some pub-owning businesses - which culminated
in a decision by the Supreme Court last month not to hear their
appeal.
Tied leases can involve tenants buying beer and other products
and services from the pub-owning business at a higher cost than
on the open market in return for lower rent and other support.
The Code will require businesses to offer Market Rent Only leases
in certain circumstances which are free of ties.
A statutory Pubs Code and a Pubs Code Adjudicator has been in
place in England and Wales since 2016.
