A revised version of the Pubs Code is set to come into force in July, but pub organisations are “disappointed” that the government has refused to make the legislation apply retrospectively.
The British Pub Confederation has claimed the failure to backdate the Code to its original launch date of 26 May could leave over 400 pub tenants in need of compensation.
The BPC estimates that for each month the code is delayed, 220 tenants could miss out on the chance to switch from the traditional beer tie to Market Rent Only agreement.
The beer tie is a 400-year-old system that requires tied tenants to buy beer and other agreed supplies directly from their landlords rather than on the open market.
When the Pubs Code is enforced, tied tenants will be able to break away from the beer tie and pursue a Market Rent Only option with large pubcos at pre-identified times such as rent reviews.
Greg Mulholland MP, chair of the British Pub Confederation, said:
We are pleased that the Department for Business, Innovation and Skills says the Code should be implemented in July and have finally laid the legislation before Parliament. We now call on BIS to stick to that commitment, not missing any more deadlines for the Pubs Code.
However, the Code must be applied from 26 May 2016 as laid down in the Small Business Enterprise and Employment Act, and as tenants and pubcos expected. This means BIS has completely failed to deliver the will of Parliament, leaving over 400 tenants without their legal right to the Market Rent Only option.
There are clear precedents for such legislation to be retrospective, but if the Government will not do this they must compensate tenants who have missed out on the Market Rent Only option or risk the threat of legal action from those tenants.
An amended version of the code, which will govern the relationship between large pub-owning businesses and tied tenants in England and Wales, was released earlier this week.
A previous version was withdrawn in early May after two drafting errors were discovered.
In addition, in a letter to the BPC the minister for small business, Anna Soubry, said the government would aim to implement the code by July.
A spokesperson for the Department for Business, Innovation and Skills said: "The regulations are now going through the parliamentary process. There needs to be debates in both Houses and it is expected the regulations will come in force before the summer recess in July."