The government has said it will discuss the soon-to-be-implemented Pubs Code with the British Beer and Pub Association (BBPA), which has attacked key sections of the code as "unworkable".
The Department for Business Innovation and Skills (BIS) has said it will meet with the industry body after the BBPA slammed the new statutory code last week for not providing sufficient transition period, as well as issues with dry-rent and new legislation that could hold back entrepreneurs seeking to enter the pub industry.
"The Pubs Code seeks to ensure that the 12,000 tied-tenants in England and Wales can operate in an environment that is fair and allows them to thrive. Tenants will be provided with the protections of the Code as of the statutory deadline of the 26 May. We will meet with the BBPA shortly to discuss their concerns," a BIS spokesperson told City A.M.
Although the meeting was initially scheduled to be held this week, City A.M. understands it has been pushed back.
The Pubs Code, which was first floated in June 2014, will regulate the relationship between tied pub tenants and the large pub-owning business which rent the pubs to them and sell tied products.
It will apply to all businesses owning 500 or more tied pubs in England and Wales when it comes into force next month.
It will be implemented through the newly-created role of Pubs Code Adjudicator, although the government's appointee - Paul Newby - has been criticised by both ministers and the pub industry for conflicts of interest.
“We believe that key aspects of the Pubs Code are unworkable and are seeking an urgent meeting with Ministers to discuss," Brigid Simmonds, chief executive of the BBPA said on Friday.
"The public consultation closed on the 18 January and with six weeks to go before implementation on 26 May, we are now told that there will be no transition and that tenants who have a rent review due between 26 May and 25 November will have to be offered a Market Rent Only agreement.
"[T]here is no time for staff training of those who will have to ensure compliance with the new legislation. Some 1,000 colleagues in the industry need to understand the details of the Code and this will take time. This point also applies to tenants, as they will need to be briefed, trained and advised on the new legislation.
"BBPA also has some real concerns about other details of the Secondary Legislation, but the proposal that the waiver for investment can only be entered into where the investment is at least 200 per cent of dry rent (e.g. £50k rent and £100k investment) and for a maximum of seven years is unworkable. This puts at huge risk much of the £200m capital invested each year by pub companies in their tied pubs and will ultimately lead to further closures.
"Finally, for very small entrepreneurs wanting to own their first pub, it is very disappointing that the Government is looking to impose the statutory code elements of the legislation, such as the extensive compliance and information requirements, on them if they buy a pub from one of the large companies. The cost of compliance will be considerable."