Scottish Pubs Code for tied pubs: consultation 3

Introduction

Background

1. This is a short, targeted consultation drawing upon concerns raised by stakeholders following the making of the Scottish Pubs Code Regulations 2024. The proposals have been informed by workshops that have been carried out with tenant and pub-owning business representatives.

2. The intention is for any changes to be made to the existing Scottish Pubs Code^[1] before it comes into force on 31 March 2025.

3. The Scottish Pubs Code creates rights and protections for tied pub tenants and places requirements on pub-owning businesses (the tied pub landlords). It is the main instrument to implement the Tied Pubs (Scotland) Act 2021^[2]. It has been prepared consistently with the three regulatory principles set out in the Act. These are:

"a) the principle of fair and lawful dealing by pub-owning businesses in relation to their tied-pub tenants,

(b) the principle that tied-pub tenants should not be worse off than they would be if they were subject to neither a product tie nor a service tie,

(c) the principle that any agreement between a pub-owning business and a tied-pub tenant should fairly share the risks and rewards amongst the parties."

4. The objective of the Scottish Pubs Code is to improve the position of tied pub tenants through the creation of a statutory framework to govern the relationship between pub-owning businesses and their tied pub tenants.

5. The Scottish Government supports the principle of fair and equitable treatment within tied pub lease agreements and has a desire to see a vibrant tenanted pub sector in Scotland. The Scottish Government recognises that pub-owning businesses, tenants, and brewers, all have a vital role to play in the health of the tied pubs sector. The investment by pub-owning businesses in the tied pub system supports our hospitality sector, which is for the benefit of the wider community, and pub-owning businesses and tenants must have the ability to determine how their business works, underpinned by a fair and transparent regulatory framework as set out in the Scottish Pubs Code. The Scottish Pubs Code supports achievement of the Scottish Government's National Strategy for Economic Transformation through tackling inequality.

Purpose of this paper

6. We have sought to focus on proposals and concerns that have been put forward by the sector and which will improve the position of tied pub tenants or improve the delivery of the code. This consultation paper invites your views on various parts of the Scottish Pubs Code. Topics covered within the consultation paper include: Market Rent Only leases, guest beer agreements, information for prospective tenants, rent assessment, flow monitoring devices and gaming machines.

7. After the consultation responses have been analysed, Ministers will decide what changes should be made to the Scottish Pubs Code. The changes will be made by regulations and will be submitted to the Scottish Parliament for approval.

What this consultation does not cover

8. This consultation does not revisit all topics within the existing code. It also does not cover questions about whether there should be a code or not. The Tied Pubs (Scotland) Act 2021 ("the Act") requires there to be a Scottish Pubs Code.

9. There will be regular opportunities to review how the Scottish Pubs Code is working and how the Scottish Pubs Code Adjudicator is performing. This is a requirement of the Act.