Caroline Shea QC examines the implications of the Pubs Code 2016
- Parliament has legislated to enable a pub tenant to choose at various trigger points whether to continue with a tied lease or to opt for a market rent only lease.
On 21 July 2016 the Pubs Code 2016 (the Pubs Code) came into force. The Pubs Code is secondary legislation enacted pursuant to Pt 4 of the Small Business, Enterprise and Employment Act 2015 (the 2015 Act). Part 4 of the 2015 Act was enacted in response to a perception which had been gaining strength over the previous two decades that the contractual arrangements governing tied pubs were both anti-competitive and commercially unfair to the publican-tenant. Under a tied lease, in return for a lower rent the tenant is obliged to procure its beer and other alcoholic beverages either from the landlord or from a third party nominated by the landlord. Typically, the price of the beer obtained in this way is charged to the tenant at significantly (up to 60%) in excess
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