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

Footnotes

1. This estimate is based on a partial return from the Scottish Beer and Pub Association (SBPA) in May 2023 and applies a 7% reduction to the number of tied pubs since 2019 (2019 figure from Policy Memorandum to the Tied Pubs (Scotland) Act 2021), which mirrors the reduction in the number of all pubs in Scotland between 2019 and 2023, based on ONS UK Business Count number of local units and using industry code 56.302 Public houses and bars via NOMIS.

2. Estimate based on pub-owning businesses who responded to the Scottish pubs code consultation, returns from the SBPA and the list of pub-owning businesses mentioned Policy Memorandum to the Tied Pubs (Scotland) Act 2021).

3. As of 2023, there were 4,380 Scottish licenced premises based on figures from the British Beer and Pub Association (BBPA). The differences between ONS and BBPA/SBPA data is understood to be due to a difference in terminology, i.e., the BBPA/SBPA having a broader definition of what constitutes a pub which includes some hotels (pubs with rooms), inns and restaurants.

4. Tied Pubs (Scotland) Act 2021 (legislation.gov.uk)

5. Meeting of the Parliament: 23/03/2021 | Scottish Parliament Website

6. Meeting of the Parliament: 23/03/2021 | Scottish Parliament Website

7. Meeting of the Parliament: 23/03/2021 | Scottish Parliament Website

8. Meeting of the Parliament: 23/03/2021 | Scottish Parliament Website

9. Meeting of the Parliament: 23/03/2021 | Scottish Parliament Website

10. Official Report - Parliamentary Business : Scottish Parliament

11. About the National Outcome | National Performance Framework

12. Tied pubs - pubs code consultation: workshops with tenants - gov.scot (www.gov.scot)

13. Scottish Pubs Code - Part 1 consultation: analysis report

14. Scottish Pubs Code - Part 2 consultation: analysis report

15. Tied Pubs - Scottish Pubs Code - part 1: consultation analysis - gov.scot (www.gov.scot) Question 5

16. Scottish Pubs Code Consultation 2: analysis report - gov.scot (www.gov.scot)

17. Scottish Pubs Code Consultation 2: analysis report - gov.scot (www.gov.scot)

18. Scottish Parliament, Stage 1 Report on the Tied Pubs (Scotland) Bill, November 2020.

19. In our first consultation, we proposed setting a brand production level of 60,000hL but the feedback was that this was arbitrary. The evidence showed that 100,000hL was more appropriate, as it gave greater access to beer brands with higher sales volumes. Moreover it also mirrored the changes made by the new Small Producers Relief for alcohol duty, which replaced Small Brewers Relief. The new relief increased the volume that is eligible for alcohol duty discount to 100,000 hL (assuming a beer strength of 4.5% ABV), previously Small Brewers Relief (the old scheme) capped this at 60,000 hL.

20. Special Commercial or Financial Advantages

21.This refers to terms that would be unreasonable to include in an MRO lease, such as the lease term being shorter than the existing lease.

22. Statutory Review of the Pubs Code and the Pubs Code Adjudicator: 2016-2019 (publishing.service.gov.uk)

23. Statutory Review of the Pubs Code and the Pubs Code Adjudicator: 2016-2019 (publishing.service.gov.uk)

24. Pub Partnerships | BBPA (beerandpub.com)

25. Further information on this is provided in the Financial Memorandum to the Tied Pubs (Scotland) Bill

26. Report on the second statutory review of the Pubs Code and PCA October 2023 (publishing.service.gov.uk)

27. Independent Assessor fee structure - GOV.UK (www.gov.uk)

28. Tied Pubs Bill Financial Memorandum (parliament.scot)

29. Judgments in Arbitration Appeals and Publication of Arbitration Awards - GOV.UK (www.gov.uk)

30. It is possible that existing Guest Beer agreements between POBs and tenants will be for beers that exceed 5,000hL in sales. It is possible such agreements would be withdrawn in future to align with the guest beer agreement under the Code.

31. In the same survey, 3 tenants (10% of survey respondents) answered that they would not request a guest beer agreement through the code, and 8 tenants (25% of respondents) were unsure.

32. The Scottish Beer and Pub Association note that consumers are increasingly attracted to local, natural and unusual beers, searching for beers of different origins, styles, strengths and tastes.

33. Note, these changes in profits are equal and opposite to the benefits calculated for tenants.

34. Scottish Pubs Code: Consultation 2: analysis report (www.gov.scot)

35. Notice_of_a_financial_penalty_addressed_to_Star_Pubs__Bars_Limited.pdf (publishing.service.gov.uk)

36. Report on the second statutory review of the Pubs Code and PCA October 2023 (publishing.service.gov.uk)

37. The Pubs Code etc. Regulations 2016 (legislation.gov.uk)

38. Research on the pub sector in Scotland phase 1: scoping study - gov.scot (www.gov.scot)

39. Gross domestic product at market prices:Implied deflator:SA - Office for National Statistics (ons.gov.uk)

40. OFT's response to CAMRA's super-complaint (nationalarchives.gov.uk) This report has been used as it is the most comprehensive data available.

41. £23,800 is calculated by subtracting the value of lost SCORFA benefits (£5,700) from £29,500.

42. OFT's response to CAMRA's super-complaint (nationalarchives.gov.uk)

43. ADMIRAL TAVERNS INVESTS OVER £10 MILLION INTO ITS COMMUNITY PUBS - Admiral Taverns

44. Stage 1 Report on the Tied Pubs (Scotland) Bill (azureedge.net)

45. Tied Pubs (Scotland) Bill Stage 1 consideration – Survey of tied tenants

46. Independent Assessor fee structure - GOV.UK (www.gov.uk)

47. Tied Pubs Bill Financial Memorandum (parliament.scot)

48. Assumes around 3% of tied pubs will seek an MRO lease.

49. The_Pubs_Code_Adjudicator_MRO_research_findings_report.pdf (publishing.service.gov.uk)

50. Pub Partnerships | BBPA (beerandpub.com)

51. Executive summary - Tied Pubs - Scottish Pubs Code - part 1: consultation analysis - gov.scot (www.gov.scot)

52. These estimates exclude sales from events of an occasional nature, such as outdoor festivals, that would include Music, Arts, Food & Drink. CGA and NIQ data shows sales whereas the Pubs Code regulation is on production.

53. Tied Pubs Final Report (publishing.service.gov.uk)

54. Data & Statistics | BBPA (beerandpub.com)

55. (3.43-1.62)/3.43 = 53%

56. Tied down: The beer tie and its impact on Britain's pubs | IPPR

57. (1.62-1.14)/1.14 = 42%

58. It is recognised that 2021 may not be representative of the on-trade sales in future years, due to the impact of the Covid-19 pandemic on the hospitality sector. For these purposes we took a 5-year average of beer sales from 2017-2021. The average on-licence beer consumption across the UK was 16.9hL using this method.