Scottish Tied Pubs Adjudicator's investigation policy: consultation analysis

Section 1: Introduction

This report presents the findings of an analysis of the responses to a consultation on the Scottish Tied Pubs Adjudicator’s investigation policy.

Background

The Tied Pubs (Scotland) Act 2021 (the Act) received Royal Assent in May 2021. Its purpose is to govern the relationship between tied-pub landlords (pub-owning businesses) and tenants. The Act covers all tied pubs and pub-owning businesses in Scotland. As of May 2023, the Scottish Government estimated that there were just under 700 tied pubs^[2] in Scotland and at least 10 pub-owning businesses^[3].

The Act commits the Scottish Government to appoint a Scottish Pubs Adjudicator (the Adjudicator) and make a Scottish Pubs Code (the Code) consistent with the regulatory principles in the Act that:

• There is fair and lawful dealing by pub-owning businesses in relation to their tied-pub tenants
• Tied-pub tenants should not be worse off than they would be if they were not subject to any product or service tie
• The tied agreements offer a fair share of risk and reward to both parties.

The Code is due to be in place by April 2025.

The Adjudicator’s role is to oversee, advise on and enforce the Code, ensuring compliance with the Code, providing arbitration expertise and resolving disputes between tenants and pub-owning businesses. The Adjudicator has the statutory power to investigate suspected breaches of the Code and to impose enforcement measures, including financial penalties, if a breach is confirmed.

The consultation

A consultation on the Adjudicator’s investigation policy was launched on 16 October 2024, with a closing date of 27 November 2024 for responses.

The consultation included four questions seeking views on the criteria to be adopted in deciding whether to carry out an investigation; the practices and procedures to be followed in carrying out an investigation; the criteria to be adopted in deciding whether to take enforcement action; and what type of action to take; and the criteria to be used in setting financial penalties. For reference, the consultation questions are shown in full in Annex 1. It should be noted that this consultation focused solely on the Adjudicator’s investigation and enforcement functions; the Scottish Government had previously conducted three separate consultations on the Code itself.

The consultation was available on the Scottish Government’s consultation webpage. A link to the survey was disseminated via the Adjudicator’s stakeholder engagement group for sharing with relevant groups and networks. Respondents could complete an online consultation questionnaire or submit a response by email or post.

The consultation aimed to engage both pub-owning businesses and tenants in considering the Adjudicator’s investigation and enforcement powers regarding compliance with the Code. Going forward, the views expressed will inform the development of the Adjudicator’s investigation policy, and help ensure fair and transparent enforcement of the Code.

The respondents

The consultation received a total of 8 responses.

The consultation included a series of questions seeking further information about respondents. This section presents information drawn from the responses to the questions on respondent types and locations and numbers of tied pubs held by pub-owning businesses.

Respondents were asked to identify themselves as a pub-owning business, a tied-pub tenant, an individual or an organisation. In response to this question 4 respondents identified as pub-owning businesses, 3 identified as organisations, and 1 identified as an individual. No respondent identified themselves as a tied-pub tenant. See Table 1.1.

A list of the respondents to the consultation is included at Annex 2.

Pub-owning businesses were asked to provide details of the local authority areas in which they held tied pubs. Each of the four pub-owning businesses provided this information which indicated that, between them, they operated pubs in every local authority area in Scotland. See Annex 3 for full details.

Pub-owning businesses were also asked to indicate the number of occupied and unoccupied tied pubs in Scotland. Each of the four pub-owning business respondents provided details:

• One pub-owning business indicated that it had 11–20 occupied tied pubs (and did not indicate a number for unoccupied tied pubs)
• One pub-owning business indicated that it had 51–100 occupied tied pubs and 2–4 unoccupied
• Two pub-owning businesses indicated that they had 101–499 occupied tied pubs and 5–16 unoccupied

One pub-owning business provided the number of tied pubs held in each local authority area.

Nature of the responses

All respondents provided an answer at each of the closed (tick-box) questions, while between 4 and 6 respondents provided comments at each question (4 respondents commented at Questions 1 to 3, while 6 respondents commented at Queston 4).

Analysis and reporting

The remainder of this report presents a question-by-question analysis of responses to the consultation questions – both the closed (tick-box) questions and the follow-up questions inviting respondents to provide further comments.

The responses to the closed questions are presented in tables in the report. The comments provided by respondents at each question are presented below each table.

As with any public consultation exercise, it should be noted that those responding generally have a particular interest in the subject area. Therefore, the views they express cannot necessarily be seen as representative of broader public opinion.