Flip side to Tied Pubs bill could see a negative effect at the expense of tenants - Robert Shepherd
The Tied Pubs (Scotland) Bill is being pushed through the Scottish Parliament to redress existing pub tenancy agreements believed, by some in the industry, to be unfairly skewed in favour of the pub owner at the expense of the tenant.
A key component of the bill is to allow tenants to go ‘free of tie’ so they may purchase beer cheaper elsewhere rather than pay ‘over the odds’ for a limited selection from their brewer landlord. Instead, tenants will be allowed to simply pay rent, known as the Market Rent Only option (MRO). The bill is also designed to allow tenants to buy from local brewers to offer more consumer choice, while making bigger profits for themselves. So far so good; after all, what tenant wouldn’t want to make a little more money?
There is a flip side however, because if the bill does indeed become law it could have a negative effect for many tenants. In fact, if the legislation had passed before the Covid-19 pandemic my own pub, Edinburgh’s Thistle Street Bar, would probably have closed for good instead of preparing to reopen once restrictions are lifted. I may, of course, have a different viewpoint from other pub tenants so can only speak for myself and my own experience as a Belhaven ‘Pub Partner’, but here is why I believe the current tenancy model should remain as is.
I used to manage bars in the 1980s for small private businesses and large operators. After a long spell in media, I decided to become involved in hospitality again three years ago, but this time with my own pub. To achieve this, I could have tried to raise large amounts of capital to go it alone as an independent operator (and balance bigger rewards against bigger risks) but, having been away for so long, I knew that I needed to update my skills so chose a tenancy with Belhaven instead.
The tenancy option appealed to me, not just for the lower risk, but because I knew I could access the support I needed to get up and running quickly. This included a low-cost entry point, guidance in putting together a realistic business plan and fully detailed terms of agreement which were required to be checked and signed by my lawyer and accountant.
I was also made aware of the existing pub code and the wholesale cost of my draught beer selection, virtually all of which are Scottish brands to reflect the traditional style of the bar. I selected to serve Belhaven Best, the only Belhaven product on the bar, but that was my choice and I didn’t have to. The majority of beers are all from small independent brewers – so much for lack of consumer choice. I do pay a higher wholesale price by sourcing my beer through Belhaven, but regard it as a fair trade-off for the support I receive which has been increased since the pandemic struck.
Over the last year while my bar has been closed, Belhaven has reduced my rent by 90% per week.
They have also given me a credit for my out-of-date stock so I can order fresh beer when my pub reopens. Additional support has included ongoing communication on available grants, access to Covid prevention training for when we reopen and wellbeing sessions for bartenders. None of this support would have been available through the MRO option. It is also unlikely that we will see any additional investment in Scottish pubs by Belhaven if the Tied Pubs (Scotland) Bill goes ahead and more of our traditional Scottish pubs may well stay closed for good.
Robert Shepherd, Licensee, Thistle Street Bar
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