Even this early in the year, it is fair to say that it is unlikely 2025 will be remembered in future as a vintage one for the Scottish licensed trade.

The list of challenges facing the hospitality sector, top of which are arguably this month's hikes in employer national insurance contributions and national living and minimum wage rates, means 2025 will not be recalled as a time when operators brought out the bunting.

However, a key development this week will potentially change a significant part of the industry for the better – and at a critical time given the prevailing economic backdrop.

On Monday, the first-ever Scottish Pubs Code came into effect, paving the way, in theory at least, for a fairer and more balanced relationship between the tenants of around 700 pubs in Scotland, and the companies from which these properties are leased.

It has been a long and difficult journey to get to this point, and while the idea of a code has been supported along the way by groups such as the Scottish Licensed Trade Association, Federation of Small Businesses and the Scottish Tourism Alliance, it has not had the full backing of the major pub-owning companies.

Indeed, it was strongly opposed by the Scottish Beer & Pub Association, which argued in April last year – when it emerged that measures in the Tied Pubs (Scotland) Bill were going ahead – that the code seeks 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”.

The SBPA, which represents major pub-leasing companies, added: “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.”

Despite such opposition, the legislation was successfully charted through the parliamentary process, and the code is now live and open for referrals.

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At its heart, the code is designed to give more rights and greater protection to tied pub tenants, who have typically been “tied” to buying beer and other products from their landlords under the terms of their lease. Tenants will be given more freedom to stock beer that is not sourced directly from their landlords, which is seen as good news for consumers as they can look forward to a wider choice at the bar, and for local producers, who will perhaps be given new routes to market.

The flexibility to buy some goods out of tie is seen by supporters as a major breakthrough. Tenants have traditionally argued that prices charged by pub-owning companies are a good deal higher than prices on the open market, and face severe sanctions if they are found to have bought goods out of tie.

Landlords have typically defended their model by saying their tenancy deals provide an opportunity for people to run their own pub at a greatly reduced cost of entry, and with the support of a major company behind them. Pub-owning companies have also traditionally argued that tenants benefit from their ability to invest in capital expenditure projects, including refurbishments, and access to support such as book-keeping.

As well as providing flexibility in buying goods, the code will ensure that prospective tenants are equipped with more information before taking on leases. The code will also soon be strengthened with the addition of further provisions in June, which will allow tenants to take on leases with more flexibility built in.

Crucially, the code will aim to reduce the number of costly disputes between tenants and landlords via a new arbitration service. Here, ministers have made a real statement of intent by appointing lawyer and disputes resolution expert Sarah Havlin, a former parades commissioner of Northern Ireland, as Scotland’s first pubs code adjudicator.

In an exclusive interview with The Herald on Tuesday, Ms Havlin, who brings more than 30 years’ experience of dispute resolution to the role, said the code will introduce the “important principle” of “fairness”, which she declared is “always a benefit in commercial relationships”.

“The pub code is underpinned by the objective of fairness and balancing the relationship between the parties to the lease, which I think will encourage better practice,” Ms Havlin said. “So I do think there is a gain in terms of trust between parties that the code can provide. I also think there is potentially a productivity gain in terms of the fairness of dealings between two parties to a commercial arrangement.”

Having witnessed the tension that can exist between tenants and landlords over many years covering the hospitality industry, it is difficult to overstate how important it will be to instil a greater degree of harmony to what can at times be tense commercial relationships.

Indeed, while it can be argued that any prospective tenant should enter lease deals with their eyes wide open, there have been plenty of instances where tenants have argued that the strict terms of leases can make it extremely difficult to make money or even take a break from their pub. Moreover, the prospect of being penalised for breaching the terms of a lease can be a source of significant stress for tenants, so the greater flexibility brought by the code should hopefully ease some tension.

This is certainly not to say the code will be a panacea for tenants’ ills. In common with the rest of the Scottish hospitality industry, many operators will from this month be dealing with much higher labour costs, with the increase in employer national insurance contributions, and the national living and minimum wage rates bringing significant pressure. This comes when the industry is also contending with elevated costs and fragile consumer confidence, and with the growth forecast for the UK economy having been slashed to 1% for 2025 by the Office for Budget Responsibility last week.

The Scottish Hospitality Group has also expressed anger this week after the Scottish Government went back on plans to reform business rates – which has long been a major ask of an industry that says it pays disproportionately higher bills than other sectors.

In these circumstances, any breakthrough for tenanted pubs, which represent around 16% of all licensed establishments in Scotland, must be welcomed as a rare shaft of light in an otherwise bleak outlook.