The UK's largest pub landlord is under formal investigation over allegations of mistreating small business owners who run its tied pubs. The Pubs Code Adjudicator has launched a statutory investigation into Stonegate, which operates over 4,500 sites across the UK. This is only the second such inquiry since the regulator was created a decade ago.
The investigation will examine concerns that Stonegate may have failed to provide accurate and transparent information to its tenants. The probe covers a five-year period and will focus on four core issues, including the condition of pubs taken on by tenants and the accuracy of financial projections given to prospective tenants.
Tied publicans are small business owners who may have been misled into taking on pubs that were not viable. The investigation will look into whether Stonegate's business development managers treated tenants within the rules and whether the company reported breaches of the code to the regulator as required.
The Pubs Code Adjudicator's annual research has shown that Stonegate's tenants have been the least satisfied of any regulated pub group for at least three years. Fewer than two in five tenants report being satisfied with their relationship with the company, compared to an industry average of two in three.
If Stonegate is found to be in breach of the code, it could face a fine of up to £16 million, or 1 per cent of its total UK turnover. The company's financial situation is already strained, with a debt burden of over £3 billion and a pre-tax loss of £174 million in the year to September 2025.
The investigation could complicate Stonegate's plans to convert more managed pubs into tenanted and leased sites. The company's chief executive has made this strategy central to its turnaround plan, but the inquiry may impact its ability to implement this plan.
The Pubs Code was introduced in 2016 to give tied tenants a fairer deal. However, some have raised concerns that the code has not been effective in protecting tenants. The investigation comes at a challenging time for the pub industry, with nearly two pubs closing every day due to rising costs.
The Pubs Advisory Service has welcomed the inquiry but questioned why it took so long. Some have expressed concern that the damage has already been done, with many people losing their livelihoods. The investigation will consider evidence from current and former Stonegate tenants, staff, and advisers.
A Stonegate spokesman has stated that the company is committed to complying with the code and treating all publicans fairly. The company will cooperate fully with the investigation.
