Tied pubs - Scottish Pubs Code - part 1: consultation
The Tied Pubs (Scotland) Act 2021 provides for the introduction of a Scottish Pubs Code. This consultation paper seeks views on the Market Rent Only lease and guest beer agreement provisions in the Code.
Glossary of terms
Tied pub: these are pubs which are owned by a pub-owning business and leased to a tenant. Tenants must buy some or all of their products and services from the pub-owning business or someone nominated by the pub-owning business ("the tie"). Ties can include, for example, beer and these products and services are often charged at a higher cost than on the open market. In return, tenants sometimes pay lower rent and receive other support from the pub-owning business.
Tied pub tenant: these are tenants under leases of tied pubs.
Pub-owning businesses: these are the landlords under leases of tied pubs.
Market Rent Only (MRO) leases: a Market Rent Only lease is a lease where the rent is set at an amount agreed between the tenant and the landlord or, failing agreement between them, at the market rate for the property and which does not include any product or service ties, complies with any requirements of the code and contains no unreasonable terms.
Guest beer agreements: this is an agreement which allows a tenant to sell to their customers at least one beer that the tenant has chosen (regardless of who produces it), at a price of the tenant's choice. The beer can be changed as often as the tenant wishes with no penalty. The agreement also needs to meet other criteria set out in the code.
Investment agreements: an investment agreement means a written agreement between the pub-owning business and their tenant for the pub-owning business to invest in capital improvement works to the pub.
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