U.K. considers easing pub tenants’ path to free-of-tie deals

The U.K. government is considering changes to the pubs code that could make it easier for tied pub tenants in England and Wales to seek a free-of-tie deal, as regulators warn that fewer tenants are able to reach the key points in their contracts that allow them to do so.

In remarks published Thursday by The Morning Advertiser, Fiona Dickie, the Pubs Code Adjudicator, said ministers are developing proposals to revise the code’s market rent only, or MRO, gateway provisions and the criteria that allow tenants to opt out. The work is moving alongside plans announced in the Autumn Budget to create a “guest beer” provision intended to help brewers keep access to pubs covered by the code.

The pubs code governs dealings between large pub-owning businesses and their tied tenants. Its central aim is to ensure tenants are treated fairly and lawfully and are no worse off than they would be if they were not tied to a pub company for beer and other supplies.

Dickie said the government’s statutory review recognized that the adjudicator’s office has been broadly effective in enforcing the code. But she also pointed to concern about whether tenants can still make practical use of the MRO option, which lets a tenant compare a tied offer with a free-of-tie offer and choose the better arrangement for the business.

Under the current system, tied tenants can request MRO at four trigger points in a contract. In practice, Dickie said, only two are commonly used: a five-year rent review and the renewal of an agreement, where no agreed investment exemption applies.

Data published by the British Beer and Pub Association and cited in the article showed there were 1,703 valid MRO requests between the start of the code in 2016 and April 2026. The yearly number has declined over time, falling to 88 in 2024/25 and 82 in 2025/26 from 216 in 2017/18.

Dickie said the lower number of requests does not appear to reflect weaker demand from tenants. She said tenant awareness of the right remains relatively high, with the 2026 Pubs Code Adjudicator survey finding awareness at 70%. She also said the share of tenants who serve an MRO notice when they actually reach a rent review or renewal point has stayed fairly steady at about 20% a year from 2020 through 2026.

The share of tenants who go fully free of tie at the end of the MRO process has also remained stable at about 35% over the last two statutory review periods, according to the article. Dickie said that pattern suggests the problem is not a collapse in tenant interest, but a fall in the number of opportunities tenants have to use the right.

She linked that change to shifts in the structure of pub company estates over the past decade. Pub companies, she said, have increasingly offered shorter agreements, such as five-year deals, and these often do not come with the statutory renewal rights that were once more common. At the same time, alternative operating models, including franchise and profit-sharing arrangements, have become more widespread.

According to compliance data first submitted in 2018, 10,099 tied pubs were covered by the code at that time. By the end of March 2026, that number had fallen to 8,331, a drop of 17.5%.

Over the same period, the six regulated pub companies expanded their use of alternative business models. By the end of March 2026, there were 2,398 franchise or other profit-sharing agreements, with 1,490 of them reported as regulated by the code. Dickie said the figure rose sharply in 2025 largely because Stonegate accepted that changes to its Craft Union agreement brought it clearly within the code.

In March 2025, the adjudicator said it was minded to the view that some other profit-sharing or turnover-sharing agreements might also fall under the code, although it did not then consider it appropriate to require compliance in relation to them. Dickie said the statutory review report states that the government does not currently plan to amend the code specifically for innovative agreement types, and that the regulator may revisit its published position on those agreements later.

The regulator has asked the secretary of state to consider at least one targeted change to widen access to MRO. Dickie said the adjudicator proposed simplifying the code’s definition of a “trigger event,” one of the MRO gateways that is largely unused, so that tenants facing a major event affecting trade at their pub could use it more easily.

That change, if adopted, would address a broader concern raised in the statutory review: that limited and shrinking access to MRO may be restricting the code’s ability to deliver its “no worse off” principle through side-by-side comparison of tied and free-of-tie offers.

The government’s separate plan for a guest beer provision would also affect supply arrangements in tied pubs. While the details have not yet been set out in legislation, the measure is intended to preserve brewers’ route to market in code-covered pubs. More broadly, any expansion of access to free-of-tie contracts could strengthen tenants’ leverage in negotiations and potentially open more room for brewers and other drinks suppliers to sell into venues that have traditionally been tied to a single pub company’s purchasing model.

Dickie said any amendments to the pubs code will have to remain consistent with its two overarching principles. She framed the current debate as part of a wider reassessment of how the code should work after a decade in which the pub trade has faced major pressure from the pandemic, the cost-of-living crisis and shifts in consumer behavior, while pub closures and new business models have reshaped the market.