Pub secures reduced tied rent and discounts
The Pubs Code Adjudicator is responsible for enforcing the statutory Pubs Code. The Pubs Code regulates the relationship between all pub companies owning 500 or more tied pubs in England and Wales and their tied tenants. Tied tenants are those that are obliged to purchase beer and/or other products or services from their landlord.
An interesting case study was recently published on GOV.UK by the Pubs Code Adjudicator and explains in some detail how an Amersham based Pub managed to use the Market Rent Only (MRO) procedure to negotiate a reduced tied deal and further discounts. The MRO option allows for the granting of ‘free of tie’ rent between the tenant and the pub owning business. An MRO can only be requested at specific intervals such as the receipt of a rent assessment proposal or lease renewal.
In the case at point, the pub tenant managed to save £20,000 on their tied rent and a significant discount on barrelage. This created total saving of some £65,000 a year.
Any tied pub tenants seeking an MRO are advised to take specialist advice as to how best to negotiate a new deal.