PROPOSED legislation that would introduce a statutory code of conduct to govern the relationship between pub tenants and their landlords has progressed through the second stage in the Scottish Parliament.

However, its progress has set two of the Scottish licensed trade’s biggest representative groups on a collision course.

The Tied Pubs (Scotland) Bill, put forward by the Labour MSP Neil Bibby, proposes the introduction of “market-rent-only” lease deals. That would allow tenants to pay the market rate to rent pubs without having to buy beer from landlords, effectively ending the “beer tie”.

The Scottish Beer & Pub Association (SBPA), which counts some of the UK’s biggest pubcos among its membership, has mounted a vociferous campaign against the Bill, and claimed tonight that its proposals would “materially impact” the relationship between tenants and landlords.

The group argues that the Bill “seeks to interfere with existing commercial arrangements”, and notes that more than 150 Scottish pub tenants recently written to First Minister Nicola Sturgeon asking her to dismiss it.

The Scottish Licensed Trade Association, which represents independent licensees, supports the proposed legislation. It maintains that measures in the Bill would strengthen the position of tenants in the relationship with landlord, and put Scottish tenants on an equal footing with their counterparts in England. A statutory code of conduct has been in place in England for several years.

Emma McClarkin, chief executive of SBPA said: “This is a sad day for the leased and tenanted pub sector in Scotland. Despite efforts from tenants and pub owning businesses alike, our parliamentarians are simply not listening to them and seem determined to push through a Bill which will have a long-term detrimental effect on the fabric of Scottish pub sector. 

“The Bill affects nearly a fifth of Scotland's pubs and is neither required, nor is drafted in such a way as to benefit either tenants or our member companies.  In just 24 hours tenants running 155 pubs across the country rallied together to write to the First Minister to express their dire concerns about it.  At a time when pubs in Scotland are fighting for their very survival, they need their Parliamentarians to support them, not do anything to hinder their recovery.”

The SBPA argues that the tied pub model allows landlords and tenants to “share the financial risk and reward of running a pub”. Tenants benefit from the investment landlords make in their premises, as well as guidance and advice, it adds.

According to the SBPA, the “market-rent-only” provision of the Bill would allow tenants to break leases with no notice, having already received financial investment from the landlord.

The Bill will now be considered by the full Scottish Parliament in stage three of its progress. Amendments can be made at stage three.