Small Business, Enterprise and Employment Bill

Page 148, line 13, leave out from beginning to “require” in line 15 and insert “The
Adjudicator may, for the purposes of exercising functions in relation to the offer of
a market rent option or the provision of parallel rent assessments,”

Page 37, line 37, leave out “all provisions of the Pubs Code are” and insert “the
Pubs Code is”

Page 37, line 38, after “with” insert “—

(a)   ”

Page 38, line 1, leave out from beginning to “the” in line 3 and insert—

“(b)   ”

Page 38, line 20, leave out “large”

Page 38, line 21, after “tenants” insert “falling within section 67(1)(b)”

Leave out Clause 42 and insert the following new Clause—

“Pubs Code: market rent option

(1)     The Pubs Code must require pub-owning businesses to offer their tied pub
tenants falling within section 67(1)(a) a market rent option in specified
circumstances.

(2)     A “market rent option” means the option for the tied pub tenant—

(a)   to occupy the tied pub under a tenancy or licence which is MRO-
compliant, and

(b)   to pay the market rent in respect of that occupation.

(3)     The Pubs Code may specify—

(a)   circumstances in which a market rent option must or may be an
option to occupy under a tenancy;

(b)   circumstances in which a market rent option must or may be an
option to occupy under a licence.

(4)     A tenancy or licence is MRO-compliant if—

(a)   taken together with any other contractual agreement entered into
by the tied pub tenant with the pub-owning business in connection
with the tenancy or licence it—

(i)   contains such terms and conditions as may be required by
virtue of subsection (5)(a),

(ii)   does not contain any product or service tie other than one in
respect of insurance in connection with the tied pub, and

(iii)   does not contain any unreasonable terms or conditions, and

(b)   it is not a tenancy at will.

(5)     The Pubs Code may specify descriptions of terms and conditions—

(a)   which are required to be contained in a tenancy or licence for it to
be MRO-compliant;

(b)   which are to be regarded as reasonable or unreasonable for the
purposes of subsection (4).

(6)     Provision made under subsection (1) may, in particular, require a pub-
owning business to offer a tied pub tenant a market rent option—

(a)   in connection with the renewal of any of the pub arrangements;

(b)   in connection with a rent assessment or assessment of money
payable by the tenant in lieu of rent;

(c)   in connection with a significant increase in the price at which any
product or service which is subject to a product or service tie is
supplied to the tied pub tenant where the increase was not
reasonably foreseeable—

(i)   when the tenancy or licence was granted, or

(ii)   if there has been an assessment of a kind mentioned in
paragraph (b), when the last assessment was concluded;

(d)   after a trigger event has occurred.

(7)     The Pubs Code may specify what “renewal” means in relation to a tenancy
or a licence for the purposes of subsection (6).

(8)     In subsection (6) “pub arrangements”, in relation to a tied pub, means—

(a)   the tenancy or licence under which the tied pub is occupied, and

(b)   any other contractual agreement which contains an obligation by
virtue of which condition D in section 65 is met in relation to the
premises.

(9)     In this Part a “trigger event”, in relation to a tied pub tenant, means an
event which—

(a)   is beyond the control of the tied pub tenant,

(b)   was not reasonably foreseeable as mentioned in subsection (6)(c),

(c)   has a significant impact on the level of trade that could reasonably
be expected to be achieved at the tied pub, and

(d)   is of a description specified in the Pubs Code.

(10)     In this Part “market rent”, in relation to particular premises at any time,
means the rent which the premises might reasonably be expected to fetch
at that time in the open market, on the assumption that condition B in
section 65 continues to be met.”

Insert the following new Clause—

“Market rent option: procedure

(1)     The Pubs Code may—

(a)   make provision about the procedure to be followed in connection
with an offer of a market rent option (referred to in this Part as “the
market rent option procedure”);

(b)   confer functions on the Adjudicator in connection with that
procedure.

(2)     Provision made under subsection (1) may, in particular—

(a)   make provision for the tied pub tenant to give notice to the pub-
owning business that the tenant—

(i)   considers that circumstances are such that the pub-owning
business is required to offer the tenant a market rent option,
and

(ii)   wishes to receive such an offer;

(b)   require the appointment of a person (referred to in this Part as an
“independent assessor”) to determine the market rent of the
premises concerned in a case where the pub-owning business and
the tied pub tenant cannot agree on that market rent;

(c)   require that appointment to be made by the pub-owning business
and the tied pub tenant acting jointly or (where they cannot agree
on a person to appoint) by the Adjudicator;

(d)   require the Adjudicator to set criteria which a person must satisfy
in order to be appointed as an independent assessor;

(e)   specify that the determination of the market rent by the
independent assessor must be conducted in accordance with
provisions of documents specified in the Pubs Code;

(f)   where any document is specified for the purposes of paragraph (e),
refer to the provisions of the document as amended from time to
time.

(3)     The Pubs Code may make provision for—

(a)   the tenancy or licence under which the tied pub is occupied, and

(b)   any other contractual agreement entered into by the tied pub tenant
with the pub-owning business in connection with the tenancy or
licence,

as they are in force when a notice is given by virtue of subsection (2)(a), to
continue to have effect until such time as the market rent option procedure
has come to an end (regardless of whether any of the agreements would or
could otherwise cease to have effect before that time).

(4)     The Pubs Code may, for the purposes of subsection (3), specify the
circumstances in which the market rent option procedure is to be treated as
having come to an end.”

Insert the following new Clause—

“Market rent option: disputes

(1)     The Secretary of State may by regulations confer functions on the
Adjudicator in connection with the resolution of disputes relating to the
offer of a market rent option.

(2)     The regulations may, in particular, make provision concerning the
resolution of disputes about whether—

(a)   circumstances are such that a pub-owning business is required to
offer a tied pub tenant a market rent option;

(b)   a proposed tenancy or licence is MRO-compliant;

(c)   a determination of the market rent of a tenancy or licence made by
an independent assessor has been made in accordance with the
Pubs Code;

(d)   any other requirement of the market rent option procedure has
been complied with.

(3)     The regulations may, in particular, confer on the Adjudicator the function
of determining the market rent of a tenancy or licence in such
circumstances as may be specified in the regulations.

(4)     Nothing in sections 45 to 49 applies in relation to provision made by virtue
of section (Pubs Code: market rent option) or (Market rent option: procedure) but
the regulations may include provision which is similar to that contained in
or made under those sections.”

Page 40, line 29, leave out “and (if applicable) (4)”

Page 41, line 11, after “with” insert “regulations under section (Market rent option:
disputes) or in accordance with”

Page 41, line 14, at end insert—

“( )   regulations under section (Market rent option: disputes),”

Page 47, line 17, leave out “under the Pubs Code in relation to” and insert “in
relation to the offer of a market rent option or”

Page 49, line 34, at end insert—

“(5A)    But condition D is not met if the contractual obligation is a stocking
requirement.

(5B)    The contractual obligation is a stocking requirement if—

(a)   it relates only to beer or cider (or both) produced by the landlord or
by a person who is a group undertaking in relation to the landlord,

(b)   it does not require the tied pub tenant to procure the beer or cider
from any particular supplier, and

(c)   it does not prevent the tied pub tenant from selling at the premises
beer or cider produced by a person not mentioned in paragraph (a).

(5C)    In subsection (5B), “beer” and “cider” have the same meanings as in the
Alcoholic Liquor Duties Act 1979 (see section 1 of that Act).”

Page 49, line 39, leave out subsection (1) and insert—

“(1)     A person is a “pub-owning business” for the purposes of this Part—

(a)   in the period beginning with the day on which the Pubs Code
comes into force and ending with the following 31 March, if
immediately before the Pubs Code comes into force the person was
the landlord of 500 or more tied pubs;

(b)   in any subsequent financial year, if for a period of at least 6 months
in the previous financial year the person was the landlord of 500 or
more tied pubs.

(1A)    For the purposes of calculating the number of tied pubs of which a person
(“L”) is the landlord, any tied pub the landlord of which is a person who is
a group undertaking in relation to L is treated as a tied pub of which L is
the landlord.”

Page 50, line 1, leave out “But regulations may” and insert “The Secretary of State
may by regulations”

Page 50, line 2, leave out “such a landlord” and insert “a pub-owning business”

Page 50, line 5, leave out “the landlord” and insert “any other person”

Page 50, line 7, leave out subsections (3) to (5)

Page 50, line 19, leave out “subsections (3) and (4)” and insert “subsection (1)(a) or
(b)”

Page 50, line 23, leave out “(5)” and insert “(1A)”

Page 51, line 22, leave out from “of” to end of line 23 and insert “determining under
section 66 whether a person is a pub-owning business”

Page 51, line 33, at end insert—

““independent assessor” has the meaning given by section (Market
rent option: procedure);

“market rent” and “market rent option” have the meanings given by
section (Pubs Code: market rent option);

“market rent option procedure” has the meaning given by section
(Market rent option: procedure);

“MRO-compliant”, in relation to a tenancy or licence, has the meaning
given by section (Pubs Code: market rent option);”

Page 51, line 35, at end insert—

““product or service tie” means a product tie or a service tie;”

Page 51, line 36, leave out “or service”

Page 51, line 36, after “obligation” insert “, other than a stocking requirement,”

Page 51, line 43, leave out paragraph (b)

Page 51, line 45, at end insert—

“service tie” means any contractual obligation of a tied pub tenant to
receive a service supplied by—

(a)   the landlord of the tied pub or a person who is a group
undertaking in relation to the landlord, or

(b)   a person nominated by the landlord or by a person who is a
group undertaking in relation to the landlord;

“stocking requirement” has the meaning given by section 65.”

Page 51, line 45, at end insert—

“( )     In this Part, references to “rent”, in relation to a licence to occupy, are to be
read as references to the fee payable in respect of the licence.”

Page 52, line 1, leave out subsection (2)

Page 144, line 9, leave out “section 41” and insert “sections 41 to (Market rent option:
procedure)”