This move means the ale house will no longer restricted to stocking drinks from a specific supplier.
The Swan, which has been named by both York CAMRA and York Press as its pub of the year, was formerly a Punch Taverns’ tied establishment, meaning all drinks stocked had to be purchased through Punch. The option to move from this arrangement to a market rent only (MRO) agreement was created by the Pubs Code Regulations 2016, but to date very few landlords have been able to take advantage of the new rules due to pub companies adopting various tactics including serving a section 25 notice on landlords opposing the grant of a new tenancy on the basis that the landlord wanted to take the back the pub and operate it themselves.
Paul Crossman, The Swan’s landlord, said: “I knew all about the Pubs Code and was extremely keen to move from a tied lease to an MRO free of tie, so as my lease renewal approached I sought legal advice from Rob and his team at Lupton Fawcett. As predicted by them, Punch issued the hostile section 25 notice at the first available opportunity.
From there it took almost a year of negotiation and determined legal wrangling before I finally received a free of tie MRO lease for The Swan – and it didn’t come a moment too soon, as the following day Heineken’s takeover of Punch Taverns was completed, which would have left me and my staff high, dry and back to square one.”
The Pubs Code Regulations 2016 were introduced by the Government as part of the Small Business Enterprise and Employment Act 2015 with the aim of regulating the relationship between pub tenants and the larger pub-owning companies (pubcos), which rent the pubs and sell supply tied products to the tenant business at prices above the open market price. The code established the right of a tied tenant to take a free of tie rent option (MRO) at certain trigger points.
Rob Cooke, a director of Lupton Fawcett’s Dispute Management team, said: “The Pubs Code Regulations were passed with the intent of assisting pub tenants by giving them the freedom to operate their business untied from the company that owned their pub.”
“We hope this small victory will inspire other pub tenants to follow suit and aim for a lease agreement that not only proves beneficial to them, but provides their customers with far greater choice.”
Picture: L-R – Paul Crossman and Rob Cooke