For UK pub tenants, the choice between a Market Rent Only (MRO) lease and a traditional tied pub agreement is a critical one, especially with the legal shifts approaching 2025. Tenants must stay informed as the landscape evolves, with England and Wales under the Pubs Code etc. Regulations 2016, and Scotland set for transformative change with the Tied Pubs (Scotland) Act 2021. Market Rent Only (MRO) vs. Tied Pubs Whats Changing In 2025 – MDE Pub Consultants help tenants to navigate these frameworks for fair, sustainable leases.
Understanding Tied Pub Agreements
Under a tied pub agreement, a tenant rents a pub from a pub-owning business (such as a brewery or a large pub company) and agrees to purchase a portion or all of their drinks, notably beer, from the landlord or designated supplier.
Theoretical Benefits of Tied Pubs:
- Lower Base Rent compared to MRO options, which can be attractive for those starting out or with limited capital.
- Access to Support by offering investment, maintenance, or business support, providing tenants with resources that may not be readily available independently.
- Lower Upfront Costs can reduce the initial financial burden, making it easier to enter the pub market.
Limitations of Tied Pubs:
- Higher Product Prices than the open market, impacting profit margins.
- Limited Supplier Choice from the landlord or a nominated supplier restricts the tenant’s ability to source products from preferred or more cost-effective suppliers.
- Reduced Flexibility in stock selection and pricing strategies, limiting their ability to adapt to market trends or customer preferences.
What is Market Rent Only (MRO)?
An MRO lease frees tenants from the “tied” agreement, allowing them to pay open-market rent and source products independently, granting greater business control.
Key Advantages of an MRO Lease:
- Greater Control Over Supplier Relationships with the choice to negotiate better prices, and wider range of products.
- Flexibility to Improve Profit Margins by sourcing products independently, enabling tenants to respond swiftly to market trends and customer preferences.
- Independence in Business Decisions and Operations to curate menu, set pricing strategies, and manage operations independently.
Responsibilities Under an MRO Lease:
- Arranging Their Own Supply Contracts requires tenants to possess strong negotiation and procurement skills.
- Covering Full Market Rent, which may be higher than the discounted rent offered in a tied agreement.
- Handling Maintenance and Logistics Without Pub Company Support as tenants do not benefit from the support often provided by pub companies in tied agreements.
MRO vs. Tied Pubs – Which Is Right For You?
Market Rent Only (MRO) Agreements: Freedom and Responsibility
MRO agreements offer significant tenant autonomy.
| Advantages | Disadvantages |
| Supplier Freedom: Tenants source stock from any supplier for better prices / preferred products. | Higher Rent: MRO agreements usually have higher base rents than tied leases, meaning higher fixed costs. |
| Control Over Stock and Pricing: Sourcing from competitive suppliers and setting own prices allows for higher profit margins. | Full Responsibility for Maintenance: Tenants handle all operations / maintenance (cellar maintenance, etc.). |
| Potential for Higher Margins: Sourcing from competitive suppliers and setting own prices allows for higher profit margins. | Loss of Landlord Support and Services: No support packages (marketing, business advice). |
Tied Pub Leases: Support and Limitations
Tied pub leases involve purchasing stock from the landlord/designated supplier.
| Advantages | Disadvantages |
| Lower Rent and Entry Costs: Tied leases often have lower base rents / upfront costs, accessible for those with limited capital. | Limited Supplier Flexibility: Tenants buy stock from landlord / specified supplier, limiting price negotiation. |
| Support Packages: Pub-owning businesses may offer support (training, marketing, maintenance). | Profit Potential: Landlord’s higher product prices can impact profit margins. |
| Less Operational Burden: Some operational duties may be shared with the landlord. | Autonomy: Less control over business operations/stock selection. |
Which Is Right for You?
The choice between MRO and tied pub agreements depends on individual priorities and circumstances. MDE Pub Consultants provides a summary of the key factors to consider:
Choose MRO If:
- You prioritise operational freedom and control.
- You can manage higher upfront costs and operational responsibilities.
- You are confident in independent business management.
Choose a Tied Lease If:
- You prefer lower upfront costs.
- You will trade autonomy for reduced operational burden.
- You value a structured business relationship with a pub-owning company.
2025: What Pub Tenants Need to Do Across the UK
UK pub tenants face evolving regulations/opportunities as 2025 approaches, requiring proactive awareness for business success.
In England & Wales:
The Pubs Code etc. Regulations 2016 govern tied pub agreements. Tenants must:
- Familiarise Yourself with Your Rights regarding rent assessments, MRO options, disputes.
- Track Lease Dates and MRO Trigger Events to proactively plan strategically and avoid missing crucial deadlines.
- Engage with the Pubs Code Adjudicator (PCA) to ensure fair treatment and uphold the Pubs Code.
- Stay Informed on post-March 2025 Developments. Be aware that a statutory review of any proposed changes or amendments that may affect your tenancy.
In Scotland:
The Tied Pubs (Scotland) Act 2021 changes the sector from 31 March 2025. Tenants must:
- Check Your Lease Midpoint to request an MRO lease and plan ahead to exercise this right effectively.
- Review Your Lease Against the New Scottish Pubs Code (from 31 March 2025) to ensure it aligns with the new regulations and seek legal advice if necessary.
- Understand Your Right to Sell Guest Beers and explore how it can benefit your business.
- Prepare to Assert Your Rights Through the Scottish Pubs Code Adjudicator if necessary.
How MDE Pub Consultants Can Help You Thrive in the Pub Industry
At MDE Pub Consultants, we’ve supported hundreds of pub tenants through MRO negotiations, rent reviews, lease renewals, and dispute resolution. Whether you’re operating in Scotland, England, or Wales, we provide:
✅ Independent advice on MRO and tied lease options
✅ Support in negotiating market rent and lease terms
✅ Strategic guidance to protect your profitability and independence
✅ Representation in disputes or arbitration proceedings
Get in touch today to review your lease or prepare for 2025.
Email: info@mdepc.co.uk
Phone: 0330 088 3133
