Our traditional British pub industry has been struggling for some time and there have been repeated patterns of pubs closing down across Hampshire with tenants blaming increasing rents and compulsory tied-in purchase of products from large pub company landlords. It’s shocking that the figures show 95% of tenants are not aware of the new Pubs Code 2016 and the considerable benefit it could offer them.

Historically there has been little or no support from Government which enabled the largest pub groups to have unlimited freedom to determine their tenants rent and costs of tied in products and services. The new code, under certain conditions, provides tenants with the right to request a Market Rent Only (MRO) lease, changing the relationship to landlord and tenant only with all tied purchase agreements scrapped so the pub effectively becomes a ‘Freehouse’.

Tenants operating under an MRO lease will be able to benefit from open market prices and special offers for beer and other related products. They will also be free to stock produce from the smaller craft breweries which could help to increase markets for this quintessentially British cottage industry.

I would encourage tenants who think they may be eligible for MRO, or want to find out more about the Pubs Code 2016 to contact the specialist Commercial Property team here at Dutton Gregory for advice and support.