Scottish Pubs Code and related regulations: business and regulatory impact assessment

Annex D

List of questions to one pub-owning business as part of the Scottish Firms Impact Test

General information about your business in Scotland

• How many tied pubs do you have in Scotland?
• What is your general lease length of tied pubs?
• How many free of tie leased pubs do you have in Scotland?
• What is the general lease length?
• How many employees to you have in Scotland and across the UK?

Guest beer agreement

• Do you currently offer guest beer agreements?
• What would be the time/cost to develop a guest beer agreement?
• What are the costs and benefits of various options – guest beer agreement is available for all types of beer, guest beer agreement is focused on brands of beers with a medium production value (e.g., under 30,000hL) or guest beer agreement is focused on brands of beers with a small production value (e.g., under 5,000hL)?
• Cost to maintain guest beer equipment?

MRO leases

• Does the cost/range of beer vary if it is a free of tie pub or a tied pub?
• What is the pub-owning companies share of profit in a free of tie pub compared to a tied pub?
• What would the impact be on wet/dry rent to a pub-owning business if a tenant took an MRO lease?
• What would be the impact on investment of MRO?
• What is the cost of using a rent assessor?
• How long would it take to prepare an MRO lease/deed of variation
• What would be the costs/benefits of the following options - MRO only for new leases, MRO but restricted to certain circumstances (with an investment exception) largely as per the consultation, or MRO available to all tenants in all circumstances – in terms of share of profits, opportunities for new entrants, changes in the types of pubs (changed to other models such as selling pubs)
• Who supplies stock required under a stocking requirement in an MRO lease (brewer or pub-owning company)?

Rent reviews/rent assessment

• Time and cost to run a rent assessment/rent review?
• Cost of using a rent assessor/independent advisor?
• Likelihood of rent changing as a result?
• Percentage of existing leases that have rent review clauses?
• What would be the costs/benefits of the following options – tenant being able to request a rent review/assessment only when the landlord is proposing a change, rent review/ assessment as per the consultation if a review hasn’t taken place in the previous 5 years or when material circumstances change, rent review/assessment only if one hasn’t taken place in the previous 5 years or on request at any time by the tenant?

Costs/benefits of compliance

• What changes would be required for pub-owning businesses to comply with the code?
• How much does arbitration cost on average for the pub-owning business?
• If the maximum penalty for non-compliance was set at 1% of UK group turnover (see paragraph 45 for the definition) – how much would that be? How much would that vary if it was only focused on turnover from your Scottish Leased and Tenanted business?