The Scottish Pubs Code Regulations 2024

PART 1 General

Citation and commencement

1.  These Regulations may be cited as the Scottish Pubs Code Regulations 2024 and come into force on 7 October 2024.

Interpretation

2.—(1) In these Regulations—

“the Act” means the Tied Pubs (Scotland) Act 2021,

“code” means the Scottish Pubs Code as set out in these Regulations,

“gaming machine” has the meaning given in section 235 of the Gambling Act 2005(1),

“group undertaking” has the meaning given by section 1161 of the Companies Act 2006(2) (and related terms on which that definition relies are to be construed accordingly),

“landlord” includes any person who is a group undertaking in relation to the person who is actually the landlord,

“lease” has the meaning given in paragraph 5(4) of schedule 1 (the Scottish Pubs Code) of the Act,

“market rent” means the estimated rent which it would be reasonable to pay in respect of the occupation of the pub under a tenancy, assuming that—

(a)

the hypothetical tenancy is not subject to—

(i)

a product tie, or

(ii)

a service tie,

(b)

the hypothetical tenancy is entered into—

(i)

on the date the estimate of the rent is being carried out,

(ii)

in an arm’s length transaction,

(iii)

after proper marketing,

(iv)

between parties who are all acting knowledgeably, prudently and willingly, and

(c)

the pub will continue to be a pub,

“MRO lease” means a market rent only lease (as defined in regulation 14(1)),

“negotiation period” has the meaning given in regulation 16(5) to (7),

“product tie” means a contractual obligation which—

(a)

requires that a product to be sold in a pub must be supplied by—

(i)

the landlord of the pub, or

(ii)

a person nominated by the landlord, and

(b)

is not a stocking requirement (as defined in this regulation),

“production year” means a calendar year from 1 February to 31 January,

“prospective tenant” includes an existing tenant seeking to renew the lease of a tied pub,

“request date” means the date on which a tied-pub tenant requests in writing a guest beer agreement from the pub-owning business,

“service equipment charge” means a reasonable charge by the pub-owning business for the cost of servicing or maintaining equipment used to sell guest beer, taking into account the proportion of use of the equipment for guest beer compared to use for other products,

“service tie” means a contractual obligation which requires that the tenant of a pub receives a service, other than insurance, from—

(a)

the landlord of the pub, or

(b)

a person nominated by the landlord,

“stocking requirement” means a contractual obligation which—

(a)

requires that some of the beer or cider (or both) that is to be sold in the pub is produced by the landlord,

(b)

does not require the tenant to procure that beer or cider from a particular supplier, and

(c)

neither prevents the tenant from, nor penalises the tenant for, selling in the pub beer or cider that is produced by a person other than the landlord (although a contract term may impose restrictions on such sales),

“writing” includes electronic communication within the meaning of section 15 of the Electronic Communications Act 2000(3).

(2) References in these Regulations (except for references in regulation 6(1)(a) and (b))—

(a) to a pub-owning business include a person who has been a pub-owning business,

(b) to a tied-pub tenant include a person who has been a tenant under the lease of a tied pub.

Tied-pub tenant not to suffer detriment

3.  A pub-owning business must not subject a tied-pub tenant to any detriment as a consequence of the tenant exercising, or attempting to exercise, any right under this code.

Disputes

4.  Before submitting a dispute to the adjudicator for arbitration either under section 15 of the Act or in accordance with an agreement between the parties to the dispute, a pub-owning business must take reasonable steps to resolve such disputes informally with tied-pub tenants.

Terms of the code excluded from arbitration

5.  The following provisions of this code cannot be the subject of arbitration before the adjudicator—

(a) regulation 6 (requirement to provide information to the adjudicator), and

(b) regulation 7 (requirement to comply with adjudicator’s direction following an investigation).

Requirement to provide information to the adjudicator

6.—(1) A pub-owning business must—

(a) inform the adjudicator that the business is a pub-owning business, by the later of—

(i) the end of the period of 3 months beginning on the day on which the code comes into force, or

(ii) the end of the period of 3 months beginning on the day on which the pub-owning business becomes a pub-owning business,

(b) keep the adjudicator informed of any change, including transfer, to the ownership of the pub-owning business, and

(c) inform the adjudicator if the business ceases to be a pub-owning business.

(2) In connection with any imposition by the adjudicator of a financial penalty under section 9(2)(c) of the Act, a pub-owning business must, at the request of the adjudicator and before the expiry of a period of time specified by the adjudicator, provide the adjudicator with relevant accounting information.

(3) In paragraph (2), “relevant accounting information” means accounting information, so far as not already publicly available, sufficient to enable the adjudicator to calculate the permitted maximum penalty that may be imposed on a pub-owning business in accordance with the Tied Pubs (Fees and Financial Penalties) (Scotland) Regulations 2024(4).

Requirement to comply with adjudicator’s directions following an investigation

7.  A pub-owning business must comply with a direction given by the adjudicator under section 9(2)(a) or (b) of the Act.

Restriction on enforcing certain terms of agreement

8.—(1) A pub-owning business is prohibited from enforcing any of the following terms in a lease—

(a) a term under which a tied-pub tenant is prevented from, or can be penalised for, taking action to enforce the code,

(b) a term which provides that a rent assessment or rent review in relation to the tied pub—

(i) may be initiated only by the pub-owning business,

(ii) may only determine that the rent is to be increased,

(iii) may not determine that the rent is to be reduced.

(2) A pub-owning business may not enforce a term of an agreement between a pub-owning business and a tied-pub tenant to the extent to which it is incompatible with this code.

(1)

2005 c. 19.

(2)

2006 c. 46.

(3)

2000 c. 7. Section 15 is relevantly amended by sections 406 and 411(2) and (3) and paragraph 158 of schedule 17 of the Communications Act 2003 (c. 21).

(4)

S.S.I. 2024/187.