Many will offer vital services to communities, from village shop to post office. And importantly, it will also offer employment, often in areas where jobs are few.
The temporary closure of pubs due to the Covid-19 pandemic has sadly brought this into stark relief. Our once vibrant, thriving sector is now fighting for survival in the face of tougher, longer restrictions and there is huge concern for the future of many.
We are absolutely determined to do everything we can to weather this unprecedented storm. It will take all our energy, require huge investment, and ultimately need support from government, but I believe passionately we will get there.
But at this time when the sector is on its knees, new legislation threatens to put a giant nail in the coffin.
The Tied Pubs (Scotland) Bill, which is set to be debated and voted on by MSPs tomorrow, would introduce unnecessary and costly regulation at precisely the point when pubs can least afford it. The Bill’s proponents claim it would give better support to tenants but despite their well-intentioned ambitions, it will in fact see more communities lose the pubs they love.
The issue relates to something called the tied-pub model, a well-established system whereby a tenant can run a pub without needing to buy the freehold.
Over the years, tied pubs have been hugely popular and for good reason. The system provides the best opportunity for prospective tenants across Scotland to be able to enter the industry. The entry cost for running a tied pub is significantly lower than for those taking on a freehold.
At the same time, the tenant benefits from the backing of the pub company in the background, in particular the vital support of business development managers who work closely with each tenant to make their pub a success. The model is a fantastic stepping-stone for entrepreneurs who are passionate about hospitality and running vibrant, successful pubs.
For pub companies, the model acts as an incentive to invest over the long-term – leading to better pubs for communities to enjoy. Among our own partners, Lock 27 in Glasgow and the award-winning Barologist in Leith are examples of where we have invested hundreds of thousands of pounds to transform previously run-down sites into new and sparkling additions to the areas’ hospitality industry.
All this could be now at risk.
The Tied Pubs Bill bizarrely seeks to replicate legislation that was recently introduced for tied pubs in England and Wales, failing to recognise that the Scottish pub sector is very different.
It will see the introduction of a regulator to govern the relationship between tenant and landlord at precisely the time when we need to work hand-in-hand.
Crucially, it will materially affect the way the tied model operates and ultimately make many tenanted pubs financially unviable, forcing pub companies to either close pubs or bring them back under management. Both these scenarios would draw investment out of Scotland at the very time it is needed most, hindering the sector’s and the country’s economic recovery.
While obviously not the intention, pushing through these reforms in the middle of the pandemic is hugely counterproductive.
A crucial moment
It is precisely because of the tied model that pub companies like us have been able to support tenants financially through the pandemic – from 90 per cent rent concessions to discounts on beer to supplies of PPE.
We have committed to providing more than £2m of support to our 120 Belhaven leased and tenanted pubs – rising to an estimated £3m by the end of year.
This type of support through the tied pub model is almost entirely unique in the commercial sector and is in stark contrast to the lack of support provided by many commercial landlords to hospitality businesses throughout the pandemic.
We also need to ensure that Scotland’s pubs can not only survive this difficult period but thrive over the long term so that they can continue to provide jobs and serve their communities. To do this, significant investment will be required. This investment is less likely to come if this Bill is introduced, leading to more closures, depriving communities both of job opportunities and a place to come together.
This is a crucial moment in the future of Scotland’s pubs. MSPs must back pubs and hardworking publicans by voting against this Bill. After a difficult year, that is something we could all raise a toast to.
Nick Mackenzie is CEO of Belhaven