Pub companies, pub tenants & pub closures: background history (up to 2014)

Over the last twenty years the number of pubs across the country has fallen significantly, an issue that has aroused considerable popular interest as well as much activity within the House and its Committees. The trend has been associated with an overall decline in beer sales and the growth in the off-licence trade, particularly in the sales of alcohol by supermarkets. For many commentators the most striking aspect of the pubs sector has been the continued market strength of the pubcos – the small number of companies which lease out their pubs – despite consistent complaints that the system for regulating the legal relationship between the pubcos and their tenants is not fit for purpose.

After a series of inquiries by the BIS Committee, in January 2013 the Coalition Government announced it would consult on introducing a statutory Code of Practice and an Adjudicator, based on the model of the Groceries Code Adjudicator, to arbitrate disputes, carry out investigations and impose sanctions where a pubco had breached the Code. A consultation document was published in April 2013. The Government had anticipated publishing its response by the end of 2013, but this was subject to considerable delay. On 3 June 2014 the Government finally announced that it would proceed with the establishment of a Pubs Adjudicator. Provision for the introduction of a statutory Pubs Code for England & Wales, and an independent Pubs Code Adjudicator to enforce it, were included in the Small Business, Enterprise and Employment Bill published later that month.

The Bill did not provide for a ‘market rent only option’: provision to give all tenants the automatic right to choose a free-of-tie agreement. At the Report stage of the Bill on 18 November 2014, the Commons agreed an amendment, tabled by Greg Mulholland, to make the ‘market rent only’ option a feature of the new regulatory regime. Subsequently in the House of Lords the Government introduced a series of amendments to the Bill to retain this principle, amendments considered, and agreed, by the Commons on 24 March 2015.

This note traces the historical development of policy towards a statutory system of regulation. A second note looks at the passage of the primary legislation to provide for the new Code (SN7074).