PCA visits Nottinghamshire pubs with SIBA – January 2025

In January, the Pubs Code Adjudicator (PCA) toured a series of Nottinghamshire pubs with the Society of Independent Brewers and Associates (SIBA).   

Proceeding with a ‘mystery shopper’ type exercise, SIBA arranged for the PCA to visit pubs from across the regulated pub companies. In most cases the tied tenant was available to speak with us on the day of the visit.

These visits were different to our usual ‘day in the life’ of visits as we were not there with the pub company’s business development manager and the visits offered were confidential. 

Together with Ian Ward, Anthony Hughes, a local SIBA Brewer, and Barry Watts from SIBA, the PCA Fiona Dickie visited city centre and village pubs, wet led and destination, to see a range of operating styles.

Professional advice 

As we walked through the centre of Nottingham, the site of the planned ‘new’ shopping centre stood untouched and undeveloped, as it had for nearly 5 years. Without understanding or commenting on particular circumstances, this sparked an interesting conversation about trigger events under the Code; these are things outside of your control that will affect pub trade continuously for 12 months or more (this might be infrastructure development or parking access being removed and so on) and meet certain conditions set out in the Code. If you believe your pub might be affected by such an event, speak to your BDM, review our factsheet to see if the conditions for a trigger event might be met, and take professional advice. Strict time limits apply.

The importance of gaining professional advice was evident several times during our visits. It was good to hear some tenants acknowledging the importance of using experts from the pub trade to support business decisions, as they can understand the business and can provide relevant advice and guidance. However, it was also noted that a couple of tenants opted to seek advice from a generalist accountant rather than a trade specialist. These tenants reflected they might not have access to the same level of detailed knowledge that using a professional trade accountant might have given them. 

Tenants can consider approaching their trade body for signposting. For example, UKHospitality has a member helpline, and all tied tenants of the regulated pub companies have access to the British Institute of Innkeeping (BII)’s helplines and panels of accredited chartered surveyors (valuers), accountants and solicitors. 

Negotiating 

The pub company is required to send the tenant information in advance of taking on a pub including information and evidence to support the rent proposal and profit and loss estimate. A couple of tenants told us that doing their own profit and loss projections was a helpful starting point for negotiations with the pub company. Others noted that scrutinising the data from pub companies helped them to understand exactly what the profit and loss projection is saying and feel better able to challenge when they felt the pub company was making unrealistic trading assumptions. 

The tied rent offer should be based on the projected trade of a reasonably efficient operator.  Again, tenants said professional advisers helped them understand the data they were presented with and negotiate better although only two tenants opted to gain any form of professional advice to support their negotiations (one using a professional, another an accountant friend of the family). Three did not negotiate with the pub company on the rent offer, which they expected to be fair.  

Condition and repair 

Other discussions related to the schedule of condition and repairs. The pub company must send you a document setting out the state of the pub before you take on a new tied agreement. The repairing responsibilities of both parties must be made clear, and any maintenance, repair or improvement works which your pub company is aware must be carried out to the premises must be documented, so it is clear to both the tenant and pub company who will be responsible for doing them.  

When tenants had a surveyor review the schedule of condition and looked at the pub themselves, they told us this helped them understand the condition of the building and their repairing obligations and liabilities before they started. 

A couple of tenants noted that their pub companies were very responsive to repairs - arriving the next day to fix railings outside the property or providing dates to fix a roof within two days of reporting it. 

However, we also heard that sometimes tenants felt repairs could be done more quickly so as not to cause too much impact on the pub’s trading environment; one cited spending three days without central heating or water, another had issues with drains and another with kitchen equipment that was at its end of life but hadn’t been replaced. 

Pub Company Relationships

Good relationships are key, and two tenants felt that asking their BDM to step in to support their requests for repairs, could sometimes improve or resolve matters more quickly. Pub company conversations with tenants regarding such issues as rent proposals and repairs - whether with the BDM or someone else from the pub company - should be documented by the pub company within 14 days, and the tenant has the right to challenge the note within the following 7 days. 

While the BDM is usually a tied tenant’s first port of call at the pub company, a few tenants knew that escalating issues to their pub company’s Code Compliance Officer was open to them as an option. However, they weren’t necessarily aware of who that person was. 

Context 

During the day, we also heard from SIBA about the context tenants are operating in, such as increasing financial constraints with the rise in national minimum wage, national insurance, business rates as well as recycling costs. We also heard about the continuing trend towards drinkers wanting to stay at home rather than head to the pub, due to their own costs of living increases. This context inevitably means tenants are operating with increasingly tight margins, and so their ability to negotiate with pub companies is more important than ever.   

SIBA also reflected on a trend for drinkers to want to buy local beer rather than just perhaps regional or national beers, via Beerflex and their work towards the greater adoption of local beers in all pubs not just in the tied trade.

Summary 

The PCA would like to thank SIBA for their support in enabling the PCA to meet tied pub tenants in the Nottinghamshire area. And of course, we are grateful to each of the operators and their staff for their time and hospitality during our visits.