Pub & Bar: The growing importance of knowing your supply chain

Although the prevailing political winds might lead some to believe that ESG is in retreat in some areas, the opposite is true for ESG risks arising from supply chain. In fact, the past year has seen greater scrutiny of the supply chain coming from regulators, consumers and investors. 

With many pubs and bars sourcing products and ingredients from around the world, it is important that venues have adequate measures in place to help identify and address any ESG issues that may expose them to risk. 

Green claims

One of the most prominent ESG measures to have been implemented in recent years is the CMA’s Green Claims Code. Many venues like to tout the environmentally friendly nature of their business, but when making such claims, businesses should consider the full life cycle of their product or service, including its supply chain when making environmental claims.

For example, if marketing an ‘eco-friendly’ beer, a business must be prepared to substantiate that claim, with reference to every stage of its production, from the growth of the hops to the development of the beer, packaging and transport right up to the point that it is served. 

Inability to demonstrate these claims could mean a venue is unintentionally “greenwashing” and potentially engaging in unfair commercial practices under the Digital Markets, Competition and Consumers Act. If it can be established that any misleading green claims are likely to cause the average consumer to take a transactional decision that they wouldn’t have otherwise taken, then the CMA now has the power to fine infringing businesses up to 10% of their global turnover.

Modern slavery

Section 54 of the Modern Slavery Act (MSA) 2015 requires commercial organisations who have a turnover of at least £36 million to prepare a statement outlining the steps they have taken to ensure that slavery and human trafficking is not taking place in their business or supply chains.

Although current sanctions for failing to report on the supply chain in this context are limited, this may soon be changing. A House of Lords Select Committee recently put forward recommendations to introduce stricter sanctions for failing to comply with supply chain requirements and mandatory modern slavery due diligence indicating that an overhaul of UK modern slavery legislation and stricter regulation is on the horizon.

Although these are only recommendations and the timeframe for reform is uncertain, it would be prudent for pubs and bars to consider their supply chain in the context of modern slavery now. This will ensure compliance with current legislation as well as any future changes.

International regulations

International supply chain monitoring is also being tightened up, with new legislation / regulations being passed in the US, Canada and the EU to reflect this. Although these do not directly apply to UK businesses, it is likely that UK businesses will be indirectly affected by these regulations should they have activities within these jurisdictions. Therefore, it is important for venues to consider their supply chains, not only to ensure compliance with UK regulations but also to ensure they understand international obligations.

Conclusion

The modern pub and bar sector is globally connected and there are few that cannot afford to get better acquainted with their supply chains. Failure to do so could lead to the risks of substantial fines and civil penalties, reputational damage, a falling share price and litigation risk from those affected by misleading ESG claims or by other ESG issues within the supply chain.

This article was first published in Pub & Bar.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2025. Specific advice should be sought for specific cases. For more information see our terms & conditions.