Significant Increase in Price

See Part 1 of the Pubs Code (Regulations 3 to 6)

If you have received an invoice showing an increase in the unit price of a tied product or service from the last time it was invoiced, it may be a significant increase in price under the Pubs Code.

A significant increase in price occurs at the point when the tied pub tenant receives notification of the increase in price for the relevant product or service. In other words, the key moment is when the tenant receives the invoice, not when the service is provided, not when the work is carried out, and not when payment is made. 

When comparing unit prices, you must exclude VAT (Value Added Tax) and excise duty and disregard the effect of any discounts which the POB was not contractually required to give you. 

The Pubs Code sets out the calculation to work out if the price increase is of the required level to be considered significant.

A significant increase in price under the Pubs Code gives you the right to ask your pub company for either or both of the following: 

• a rent assessment - which begins with a Rent Assessment Proposal (RAP) for a new tied rent
• a Market Rent Only (MRO) option - to rent your pub on a free-of-tie basis 

A significant increase in price is one of four gateways to request a MRO option - called ‘MRO events’. Note: it is not a MRO event if the price increase was reasonably foreseeable when the tenancy or licence was granted or when any last rent assessment was concluded.

There are strict time limits for sending a MRO notice or requesting a rent assessment. 

The pub company must receive: 

• your request for a rent assessment within 14 days, starting the day you receive the invoice
• your MRO notice within 21 days, starting the day after you receive the invoice

See the rent assessments and rent assessment proposals factsheet

See the Market Rent Only (MRO) factsheet

The Pubs Code sets out how to calculate whether a price increase in a tied product or service is a significant increase in price.

A = The amount the products or service would have cost you last year in the comparison period if you had been involved at the current period prices.

B = The amount the products or service actually cost you in last year's comparison period. 

C = The relevant annual percentage change in the consumer price index (where that is negative, use zero)

X = X is set out in the Code and differs depending on the product or service type. Please see page 8 below. 

Look at the invoice showing the price increase in the tied product or service. Work out the period four weeks before that invoice (ending with the day it was issued). 

This four-week period is called the current period.

Work out the four-week period last year, which starts with the day 12 months before the day the relevant invoice was issued. 

This four-week period is called the comparison period.

There can only be a significant increase in price under the Pubs Code if you were invoiced for the same product or service in both the comparison period and the current period.

Identify which category the relevant tied product or service belongs to:

• Beer 
• Alcoholic drink other than beer 
• Products other than alcoholic drink 
• Services 

If the tied item falls under services, examples of services that a pub company may provide include (but are not limited to): 

Package deals for maintenance and compliance, such as: 

• servicing and compliance testing of equipment (e.g., boilers, cellar cooling)
• gas and electrical safety inspections
• assistance in meeting legal requirements (for example under health and safety or licensing legislation).
• training services 

Marketing support, where the POB provides promotional materials or marketing activity on behalf of the tenant.

Insurance, such as: 

• buildings or contents insurance arranged by the POB and recharged to the tenant. 

A “service tie” refers to any contractual obligation under which a tied tenant must obtain a service provided by the landlord or the landlord’s nominated supplier, where the tenant is required to pay a fee for that service.

List all the tied products or services within the same category identified at Step 3 that were invoiced in the comparison period. Then also note the quantities invoiced. 

• Only include the product or service if it’s supplied under a tie. For example, beer supplied under the tie and not all beer. 
• Consider products or services separately from each other within the same category where invoiced under different names or in different units (such as size or capacity) and/or in different packaging (such as bottles and cans). 
• Exclude from your list any product or service not invoiced in the current period under the same name and unit. For example, if a product has the same name but was invoiced in the current period in a different unit, you must exclude it.

Work out the percentage price increase between A and B (calculate A minus B, divide the answer by B, then multiply the answer by 100).

Example: 

1740 (A) - 1700 (B) = 40 

40 ÷ 1700 (B) = 0.0235...

0.0235 x 100 = 2.35%

Find out the annual percentage change in the consumer price index. This is published by the Office for National Statistics. 

Take the change most recently published before the day the relevant invoice was issued. This % change is C in the calculation.

Example:

If the % change in the consumer price index is 5% and the tied product is beer: 

5% (C) + 3% (X) = 8%

For a significant increase in price, the % price increase calculated at Step 5 needs to exceed the increase calculated at Step 7.

Example:

Step 5 = 2.35% 

Step 7 = 8% 

As 2.35% does not exceed 8%, in this example there is not a significant increase in price.

For general queries about the information in this factsheet, you may contact our enquiry service. 

Please note, we can provide information about your rights, the Code and our processes. We cannot advise you about your case. 

Complete our online enquiry form 

Email: [email protected] 

Call 0800 528 8080 to request a call back

This factsheet provides information to support tenant understanding. It is not a substitute for the Pubs Code framework. Our website contains other useful information about accessing your Pubs Code rights and the PCA’s role as regulator in enforcing those rights. 

You may find it helpful to take independent professional advice before making any decisions that may affect you and your business.

Last updated: March 2025