A regulatory code for pubs in Scotland will add “cost and complexity” as well as putting investment at risk, the Scottish Beer and Pub Association has said.
The Scottish government said the plans would improve the rights of tenants running tied pubs around the country while offering more choice to consumers at the bar.
The legislation was introduced in 2020 then passed the following year but a legal challenge to it from several large pub operators has only recently ended.
Holyrood ministers want to introduce secondary legislation this month, which could see a pubs code for Scotland and an adjudicator overseeing the sector operating from early October.
That will involve statutory changes meaning guest beers from small producers can be sold, while tied tenants could also choose to switch to a market rate lease whereby they could purchase goods from any supplier.
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A pubs code and regulator for companies that own more than 500 tied pubs across England and Wales was introduced in 2016. The Scottish sector is much smaller, with only about 700 tied pubs in total.
Those establishments are rented by the individuals who run them and have traditionally had to buy the bulk of their stock and other services from their landlords, which are usually large pub chains or brewers. That can mean that they are locked into prices which might be higher than if they sourced goods from elsewhere.
However, tied pub tenants can also benefit from cheaper rental and access to a larger supply chain than if they were run independently.
The Scottish Beer and Pub Association, the trade body, said the uncertainty over the legislation had already meant investment has been lost over the past few years. A spokesman said: “It’s a major disappointment for the sector.
“The code is seeking to fix a problem that doesn’t exist and will come with added costs and complexity at an extremely challenging economic time for Scotland’s pubs.
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“The prospect of a code has already stifled investment into the leased and tenanted sector north of the border and unfortunately this news is unlikely to reverse that.
“In 2023, pubs in Scotland closed at twice the rate of England. The sector, which supports around 45,000 jobs, needs positive action from government, not further unwanted, unevidenced and unwarranted interventions.
“We will, of course, work proactively with the Scottish government and the wider sector to try and minimise the negative impacts and deliver a workable code.”
Stuart McMahon, Scotland director at the Campaign for Real Ale, described the change as fantastic news for licensees and customers.
He said: “As well as making sure tied tenants can earn a decent living, the new pubs code looks set to make it easier for tied tenants to sell more locally brewed beers, increasing choice at the bar for customers of tasty and distinctive products from small, local and independent breweries — particularly cask ale.
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“These new protections in law are vital so tied tenants can make a long-term success of their pubs and shape the unique character of their businesses to become an integral part of their community.”
Gavin Stevenson, from the Scottish Licensed Trade Association, which represents independent licensees, said: “This act will regulate the tied pubs sector and provide some of the same protections that tenants in England have long enjoyed.”
Richard Lochhead, the small business minister, said: “We need to do all we can to protect pubs, bars and licensed clubs in Scotland, which in 2022 supported 34,000 jobs throughout the country and play an important role in our communities.
“I am pleased that we are now free to introduce measures contained in the Tied Pubs Act and give tenants more freedom to choose the lease which best suits their needs and diversify the number of products they can sell.”