Minister for the Future of Work (): In line with the
Government's Regulatory Action Plan, which seeks to ensure the
UK's regulatory system is targeted, proportionate and supports
growth, I am today publishing and laying before Parliament the
report on the third statutory review of the Pubs Code (the Code')
and Pubs Code Adjudicator (the PCA).
The Small Business, Enterprise and Employment Act 2015 (the Act')
provided for the establishment of the Pubs Code to regulate the
relationship between large pub-owning businesses and their tied
tenants in England and Wales. The Pubs Code is found in the Pubs
Code etc. Regulations 2016. It governs the relationship between
large pub-owning businesses, who have estates of 500 or more tied
pubs in England and Wales, and their tied pub tenants.
The Code is based on the principles that tied tenants should be
treated fairly and that they should not be worse off than they
would be if they were free of their tie. The Code includes a
range of rights and protections for tied tenants in their
commercial dealings with their Pub-owning business (POB) related
to their fair and lawful treatment. The Code also gives tenants
the right, at certain times, to exercise a Market Rent Only (MRO)
option, to change from a tied tenancy to a free-of-tie tenancy,
where the rent is set at the market level and the tenant is able
to buy products on the open market
The Act requires the Secretary of State to appoint a Pubs Code
Adjudicator (PCA). The role of the PCA is to enforce the Code and
to encourage and monitor compliance with its requirements. The
PCA can also give advice and guidance, investigate non-compliance
with the Code, enforce the Code where non-compliance is found and
arbitrate disputes under the Code. Where the PCA finds
non-compliance, it can require the publication of information,
impose financial penalties or make recommendations.
The Act requires the Secretary of State to review the following
every three years: the operation of the Pubs Code, the
performance of the PCA, and the regulations setting the PCA's
costs, fees and financial penalties. This statutory review covers
the period from 1 April 2022 to 31 March 2025 and draws on
publicly available evidence and data published in the
Government's Pubs Code Post-Implementation Review (PIR). It also
includes stakeholder views from the Government's 12-week call for
input, which was published on 22 May 2025 and received 36
responses.
This third Review found the Code to be operating consistently
with the two overarching principles set out in the Act: 1) the
fair and lawful dealing by pub-owning businesses in relation to
their tied pub tenants and 2) tied tenants not being worse off
than they would be if they were not subject to any product or
service tie.
Whilst there have been improvements in the professionalisation of
support available to tied tenants, the Review found that there is
some concern with tenants' ability to access the existing MRO
gateways. The Review also found that POBs believed MRO hindered
their ability to invest and plan for the future of their
business.
The Government will therefore develop proposals with stakeholders
to introduce additional MRO gateways and further opt-out
provisions, with the aim of further strengthening the
effectiveness of the Pubs Code.
With regards to the PCA, the Review found the PCA has been
broadly effective in enforcing the Code over the review period,
with particular success in reducing arbitration cases and
successfully completing the first investigation under the Code.
The Review however notes that there are areas for improvement.
Whilst the Secretary of State does not believe he needs to issue
new guidance under the Act; the Government encourages the PCA to
act on six areas identified in this statutory review to further
improve its effectiveness. As the PCA has now been in existence
for over a decade and the current PCA is reaching the end of her
second term, the Government will also consider commissioning an
independent review of how it protects tied tenant's rights and
fair treatment under the Code.
The Review further found that no changes were necessary to the
related Code and PCA fees, costs and penalties as set out in The
Pubs Code (Fees, Costs and Financial Penalties) Regulations 2016.
The report on the third statutory review of the Pubs Code and PCA
has today been placed in the libraries of both Houses of
Parliament.
