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20/05/15 17:58

Minister announces study on pub tenancies

‘Wet pub sector’ to be examined.

The Scottish Government will commission research to help determine if those working in the tied ‘wet pub sector’ are unfairly disadvantaged compared to other pub tenanted models, Business Minster Fergus Ewing announced at a members debate held in the Scottish Parliament today.

A tied wet pub is a public house that is contractually required to buy at least some of its beer from a particular brewery or pub company.

The UK Government introduced primary legislation during the last session to provide for a Market Rent Only Option for the Pub Co (large pub companies) tied sector and have until May 2016 to deliver the Secondary legislation to implement the measures. The makeup of the pub sector is very different in Scotland to those in England and Wales.

Following the debate Mr Ewing said:

“Pubs have an important role in our culture, heritage and economy. They employ 43,000 people of which 40 per cent are under 25 and contributes £1.5 billion to the Scottish economy.

“For the last two years the Scottish Government has sought evidence that demonstrates that the ‘tied wet’ sector is much worse off than other forms of contractual arrangements. During this time we have met with representatives from across the industry.

“This is a complex issue, which needs to be carefully examined to determine whether there is robust evidence to any support change. Evidence provided so far has failed to look at the comparative benefits and any negative impact of the ‘tied’ contract as a package.

“For this reason the Scottish Government will commission a study to look at the various pub models operating in Scotland to see whether the tied sector are being treated more unfairly than other parts of the industry. If this study is to be successful, it will require the co-operation of the whole pub Sector, from tenants to Pub Co’s.

“Before Scottish Ministers can commit to the legislative route it is important to carry out this research - which will help us come to a view. We will then be in a better position to consider whether legislation should be introduced and who it should apply to – which may be different to that identified in England and Wales where the make-up of the sector is very different to Scotland.”

Notes to editors

The Small Business, Enterprise and Employment Act, which received Royal Assent on 26 March, places a duty on the Secretary of State to introduce a Pubs Code within twelve months of section 42 coming into force, which is two months after Royal Assent. On this basis, the Code would be expected to come into force before the end of May 2016. The Code will be subject to further consultation and Parliamentary scrutiny and will reflect the changes made to the legislation and the commitments the UK Government made during the Act’s Parliamentary passage.

There has been a call for the same legislation to be introduced into Scotland. Should this happen the legislation would impact on around 500 tied tenants attached to the Pub Co Model (around 10%) of the pubs in Scotland.

STATS AT A GLANCE

Source: SBPA estimates

Scotland

UK

Independent Free Trade (pub owned/leased and run by individuals)

3,150 (64%)

21,700 (43%)

Managed pubs (pub company/brewer owned and employs a manager to run business)

650 (13%)

7,500 (15%)

Tied tenanted/leased pubs (individuals rent pub from pub owner and includes a beer/other product supply agreement

850 (17%)

19,500 (39%)

Free-of-tie tenanted/leased pubs (as above but no supply agreement with pub owner)

250 (5%)

1,300 (3%)

Total Pubs

4,900

50,000

Scotland

  • 4900 pubs in Scotland, with 1100 Tied Pubs in Scotland(source SBPA)
  • 538 tied pubs fall within the Pub. Co umbrella (around 10% of Scottish total).