A Dundee publican has urged politicians to reconsider a parliamentary bill he believes will have a negative impact on the business.
He describes the legislation, which would introduce additional regulations to commercial partnerships between a pub tenant, pub company and building owner, as “taking a sledgehammer to crack a nut”.
Craig and nine other Dundee pub tenants have now written to First Minister Nicola Sturgeon asking for the bill to be reconsidered.
What is the Tied Pubs (Scotland) Bill?
The Tied Pubs Bill is currently passing through the Scottish Parliament, with MSPs due to vote on the issue on March 23.
A tied pub is one where there is a contract between the owner and the tenant, which means the tenant has to buy certain products from the owner at a higher than normal wholesale cost, in exchange for rent of the pub.
There are currently around 750 tied pubs in Scotland, including The Admiral in Dundee.
According to the Scottish Parliament, the aim of this bill is to improve the position of tied pub tenants by introducing a Scottish Pub Code to govern the relationship between pub-owning businesses and their tied tenants.
It would also see a Scottish Pubs Code adjudicator appointed to ensure the code is applied properly.
The bill has already been through the first stage, where pub owners, drink suppliers and membership bodies were asked for their views.
Pub tenants were also asked to share their views through an anonymous survey at this stage as well.
Bill could bring “uncertainty” to publicans, says Craig
Mr McLaughlin started his pub business back in 2005 when he took on three at the same time.
However, he said this legislation change could lead to companies switching to running pubs themselves or having to change the use of the building as it could allow terms of the lease to be changed part way through.
Craig said: “It would give a huge level of uncertainty, which is my worst fear.
“The industry is reeling at the moment from uncertainty – nobody knows when we can reopen or what the landscape is going to be like in six months to a year’s time.
“Pub companies are going to have to look at themselves and say ‘okay, we’re now going to have to rethink our model because do we start bringing property back in house?’, and that reduces the entrepreneurial opportunities for someone like me, taking on premises.
“That’s my primary concern if we go down that road, that I could see swathes of my business chopped away from underneath my feet.
“I couldn’t have got where I am now without [a tied pub partnership].
“At the end of the day, the tied model is a partnership.
“Like any partnership it has to be fair.
“What people are trying to do through this bill is to roll it back to halcyon days of when they could do what they want, but the halcyon days are gone and I think it would be a retrograde step to go back to that model for everyone, because it doesn’t suit anyone.
“There may be some sites that should be a market rent only option but that’s a negotiation they should have been two parties, I don’t think it should be legislated for.”
In a recent survey conducted by the Scottish Beer and Pub Association with 200 pub tenants, 72% said reopening and business survival would have been less likely in the last 12 months if it was not for the support of their pub company partner.
Percentage share model could be the best way forward
Craig has another pub in Glasgow called The Lincoln, which is operated under a percentage share model.
He said he thinks it is the best model for publicans moving forward.
Craig said: “I think [a percentage share model] is far better.
“I’ve agreed a low level rent and we get the best possible price for a keg of lager and we have to pay a percentage of our sales.
“It’s the best model.
“The reason is you share the bad times as much as you share the good times and that’s one of the key things for me.
“The beer that I get supplied from Greene King is a great price, I can’t get that price anywhere else.
“There’s no need for me to push for market rent only because it’s getting the best price and I can see it on the invoices and I’m paying a percentage of my tills.
“So, if I have a bad week, they only get a percentage of that bad week, but if I have a great week they get a percentage of the great week, and that’s the difference.”
Government believes legislation is required
A spokeswoman for the Scottish Government said: “We recognise the significant challenges currently facing the pub sector and the real support provided by pub companies to tenants during this difficult time.
“We have liaised closely with the industry during the passage of the bill in order to ensure that it can work well for both landlords and tenants.
“The Tied Pubs (Scotland) Bill is not a government bill but the government believes that on balance, legislation is required and parliament shares this view.
“A number of improvements to the bill were made at stage two.
“In particular, Scottish ministers will be able to set out in the code the circumstances in which a market rent only lease need to be offered.
“This will ensure that the bill strikes a better balance between the rights of pub-owning companies and their tenants.
“Allowing ministers to identify the circumstances where a market rent only lease should not be offered, as part of the code, allows for proper consultation and meaningful engagement to take place.
“A tenant who is satisfied with their current lease arrangements would be under no obligation to accept market rent only.”