Introduction
The Tied Pubs (Scotland) Act 2021 marked a significant step forward for Scotland’s tied pub tenants. Enacted on 5 May 2021, this law paved the way for The Scottish Pubs Code Regulations 2024 and an independent Scottish Pubs Code Adjudicator to regulate the relationship between pub tenants and pub-owning businesses.
The Scottish Pubs Code aims to create a fairer playing field by ensuring tenants are treated fairly in lease agreements and are not locked into restrictive “beer tie” arrangements. In short, it introduces fair trading rules to the pub industry, granting tenants more control over their businesses.
Originally set to take effect in late 2024, the Scottish Pubs Code’s implementation has been delayed until 31 March 2025 due to legal challenges and further consultation.
In this article, we break down what the Scottish Pubs Code means for pub tenants—including their rights, Market Rent Only (MRO) lease options, rent assessments, and dispute resolution—and how it fosters a fairer relationship between tenants and pub-owning businesses.
Background: Why a Pubs Code in Scotland?
In the UK, many pubs operate under tied leases, meaning tenants rent their pubs from a brewery or pub company and must buy beer (and often other supplies) from their landlord. While this can come with a lower base rent, it often results in higher beer prices and restrictive agreements favouring landlords.
England and Wales introduced a Pubs Code in 2016 to regulate large pub companies (those with 500+ pubs), but Scotland was left out until the Tied Pubs (Scotland) Act 2021 was passed, paving the way for a Scottish Pubs Code. This law ensures fairer trading conditions and, in some ways, offers stronger protections than in England and Wales—covering all tied tenants, not just those renting from large national chains.
The Act introduced the Scottish Pubs Code to regulate pub-owning businesses and establishes an Adjudicator to enforce compliance. Ultimately, it aims to ensure that tenants are not financially worse off than their free of tie counterparts.
Scottish Pubs Code – Delayed but Coming
The Act required the Scottish Government to introduce a Scottish Pubs Code and appoint a Pubs Code Adjudicator to oversee its enforcement. In 2024, Sarah Havlin became the first Adjudicator, and the Code was drafted into regulations. Originally set to take effect in late 2024, industry consultation led to a slight delay, with a new start date of 31 March 2025 and MRO rights set to be introduced on 30 June 2025. This extension allows refinements based on industry feedback.
While we wait, the Scottish Pubs Code already outlines the new rights and protections for tied pub tenants. Below, we explore the key changes the Code will introduce.
Tenants’ Rights Under The Scottish Pubs Code Regulations 2024
The Scottish Pubs Code brings significant changes for pub tenants in Scotland, giving them more freedom, fairness, and protection in their agreements with landlords:
- Freedom to Stock a Guest Beer – Tenants can now offer at least one guest beer from an independent supplier, allowing more choice and competitive pricing.
- Market Rent Only (MRO) Lease Option – Tenants have the right to request an MRO lease, enabling them to pay a fair market rent while sourcing supplies independently.
- Transparent Rent Assessments – Landlords must provide clear rent calculations when reviewing or adjusting rent. This ensures tenants understand costs and avoid overcharges.
- Stronger Dispute Resolution – The Scottish Pubs Code Adjudicator will enforce the Code, resolving disputes without costly court battles.
These changes aim to foster a fairer and more balanced landlord-tenant relationship, empowering tenants to negotiate on equal terms with pub-owning businesses.
The Market Rent Only (MRO) Lease Option
What Is an MRO Lease?
One of the most impactful provisions of the Act is the Market Rent Only (MRO) lease option, which allows tied pub tenants to exit restrictive supply agreements. Instead of being forced to buy beer at inflated prices, tenants can opt for a fair market rent and source products independently.
How MRO Leases Work
Under the Pubs Code, tenants can request an MRO lease from their landlord, who must comply unless a specific exemption applies (e.g., if a landlord recently invested in the pub under a tied agreement). Importantly:
- Landlords must respond promptly – Delays or refusals are not permitted.
- The Code will set strict timelines – Landlords must provide a written offer within a set timeframe.
- The MRO lease must be free from any product or service ties
- It must not contain any unreasonable terms
When Can Tenants Request an MRO Lease?
From 30 June 2025 under the Scottish Pubs Code, tenants can request an MRO lease at the halfway point of their lease term. This differs from England and Wales, where tenants can request an MRO lease only at key events (e.g., rent reviews or lease renewals).
The ability to request an MRO lease mid-term gives Scottish tenants significant leverage – even the possibility of going free-of-tie may encourage pub companies to offer better terms.
Fair Rent Assessments & Transparency
If you’re a tied tenant, or considering an MRO lease, the Act ensures that rent assessments are transparent and fair.
What’s Included in a Rent Assessment?
Under the Scottish Pubs Code, landlords must provide a Rent Assessment Statement at least six months in advance of any rent review. This statement must include:
- Proposed new rent – Based on a set valuation date.
- Calculation breakdown – A clear methodology, key assumptions, and adjustments.
- Projected profit and loss statement – Covering the next 12 months.
- Trade volume history – Alcohol purchases (e.g., beer in barrels) over the past three years.
This ensures tenants understand how rent is determined—and provides grounds to challenge unfair increases.
Resolving Disputes With The Pubs Code Adjudicator
If a pub-owning business fails to follow the rules, the Scottish Pubs Code Adjudicator ensures compliance by resolving disputes and enforcing the Code.
What Can the Adjudicator Do?
- Prevent landlords from stalling MRO lease requests.
- Investigate breaches (e.g., unfair rent assessments, pressure tactics).
- Impose financial penalties on non-compliant pub companies.
- Provide low-cost, accessible dispute resolution.
The Adjudicator’s decisions are legally binding, ensuring stronger protections for tenants.
Fairer Deals, Stronger Pubs: What This Means for You
The Scottish Pubs Code Regulations 2024 promotes fair trading and balanced relationships between tenants and pub-owning businesses. It empowers tenants with real rights and options, reducing restrictive contracts and unfair pricing.
With MRO leases and guest beer rights, pubs can stock a wider variety of beers, benefiting both businesses and customers. The Code also promotes investment and entrepreneurship, allowing tenants to enter agreements with greater confidence.
Get Ready for the Scottish Pubs Code – Know Your Rights!
With the Scottish Pubs Code launching in March 2025, and MRO rights from June 2025 now is the time to prepare:
- Review Your Lease – Check your current agreement to see how an MRO option or rent reassessment might affect your business.
- Stay Informed – Watch for updates from the Pubs Code Adjudicator’s office, which will provide official guidance and resources.
- Get Expert Help – Navigating lease negotiations and rent assessments easily with MDE Pub Consultants.
MDE Pub Consultants – Your Trusted Partner
Need help navigating the new rules? MDE Pub Consultants specialises in helping tenants:
- MRO lease evaluations and ensure they reflect fair market terms.
- Rent assessment reviews so you’re not overpaying.
- Negotiate with pub companies to secure the best possible deal.
Take control of your future and contact MDE Pub Consultants today for expert guidance on the Scottish Pubs Code!
Email: info@mdepc.co.uk
Phone: 0330 088 3133
