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ALMR calls for Market Rent Only clarity after report criticises pub groups

23 August 2017 by
ALMR calls for Market Rent Only clarity after report criticises pub groups

The Association of Licensed Multiple Retailers (ALMR) has called for more clarity in response to the Pub Code Adjudicator's report on the Market Rent Only (MRO) verification exercise.

It has said that further guidance and clarity was needed to smooth the process and avoid unnecessary costs for operators.

The Pub Code Adjudicator's report showed that nearly 500 MRO notices (allowing tenants to request that ties be cut with breweries and pubcos to just the market rent of the building) had been served by pub tenants to their landlord. Of those, 11 MRO tenancies had been agreed, while there had been over 130 referrals to the PCA from July 2016 to April 2017.

It found that some breweries and pub groups had withheld information from tenants seeking to consider the MRO and offered unreasonably high rents.

Kate Nicholls, the ALMR's chief executive, said: "It is inevitable that new legislation brings new challenges and the PCA has been given a clear role to oversee its implementation. As it stands, delays and uncertainty are piling costs onto operators.

"The ALMR's 2017 benchmarking report shows that nearly two-thirds (63%) see a role for the tied model, so it is obviously vital that structures are in place to efficiently and equitably handle MRO cases.

"Yet the overriding message from the report is that, more than a year in, there are still too many grey areas in the process. It needs to deliver assured, decisive action to benefit all parties in disputes. Delays in the process only create unwelcome uncertainties.

"We would welcome a more proactive and conciliatory approach from pub operators. It's clear that there are some uncommon practices taking place and it's important that the PCA gives clear guidance on what is legal and acceptable within the spirit of the Code, and to do so at the very earliest opportunity."

Pub Code Adjudicator Paul Newby said: "The exercise has provided evidence on the impact of delays in the arbitration process on tenants' costs. It has also demonstrated that the effect of pub-owning businesses requiring new agreements for MRO tenancies has created a series of hurdles that, taken together, tenants consider to be insurmountable.

"I am committed to arbitrating every dispute impartially and with an open mind. However, I want to encourage positive negotiation on MRO options. To this end I have issued a number of statements about how I will approach arbitrations in order to increase the number of cases that are settled and do not become disputes brought to me for arbitration."

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