Part 3: Interpretation
Section 20: Tied pub
48.This section defines a “tied pub”, for the purposes of the Act, as a pub leased to a tenant subject to a requirement that the tenant buys some or all of the alcohol to be sold in the pub from the landlord (a pub-owning business) or someone nominated by the landlord. This does not include contractual terms which include a stocking requirement.
49.Subsection (2) defines a “stocking requirement” as a contractual obligation that requires a tenant to stock some beer and/or cider produced by the pub-owning company but does not require the products to be bought from the pub-owning business and does not prevent or penalise the tenant from stocking and selling beer and/or cider from other sources, although the pub-owning business can restrict such sales. This means that a stocking requirement is not a “tie” and that a pub-owning business could impose a stocking requirement on a pub that was not tied (for example, a pub that was operated on a market-rent-only contract basis).
50.Subsection (3) confirms that references to “landlord” include anyone who is a group undertaking (i.e. a company which owns or has a controlling interest in the pub-owning company) to which the landlord belongs.
Section 21: Pub-owning business and tied-pub tenant
51.This section states that, for the purposes of the Act, a pub-owning business is any business which leases a tied pub. (In this respect, the Act differs from the equivalent legislation in England and Wales, which, as of the time of Royal Assent of this Act, applies only to businesses that own 500 or more tied pubs.) The section also confirms that references in the Act to a “pub-owning business” and “tied-pub tenant” includes both current and former businesses and tenants, which will allow any disputes to be considered by the adjudicator following the end of a lease.
Section 22: Other expressions
52.This section defines certain other terms used in the Act.
53.The definition of “beer” and “cider” is taken from section 1 of the Alcoholic Liquor Duties Act 1979. In the 1979 Act, beer is defined to include “ale, porter, stout and any other description of beer, and any liquor which is made or sold as a description of beer or as a substitute for beer and which is of a strength exceeding 0.5 per cent”. Cider is defined as exceeding 1.2 per cent but being less than 8.5 per cent in strength.
54.The definition of “group undertaking” is from section 1161 of the Companies Act 2006, which defines it as follows:
“group undertaking”, in relation to an undertaking, means an undertaking which is—
a parent undertaking or subsidiary undertaking of that undertaking, or
a subsidiary undertaking of any parent undertaking of that undertaking.
55.“Parent undertaking” and “subsidiary undertaking” are themselves defined in section 1162 of the 2006 Act.(2)
Companies Act 2006, section 1162. Available at:
