Are pubs facing new laws as voluntary code fails?

A Government report says self-regulation isn't working, raising the possibility of more legislation for the pubs sector. Christopher Walton investigates

The prospect of tougher laws for the drinks industry had the pub industry up in arms last week as the Government prepared a path to draft yet more legislation for the beleaguered on-trade sector.

A damning report, compiled by KPMG for the Home Office and the Department of Health, said that tougher laws could be imminent after it found that the industry was not adhering to its own voluntary code on drinks promotions.

Last week also saw Alcohol Concern attacking the voluntary codes and guidelines used by the on-trade, claiming they offered no meaningful sanctions if breached. Don Shenker, chief executive of Alcohol Concern, said: "Self-regulation has clearly failed and we desperately need mandatory codes and an industry watchdog."

Over the next three months, the Government will hold a consultation on proposals including a restriction on the size of glasses alcoholic drinks are sold in, curbs on happy hours and price-based promotions such as "women drink for free" and two-for-one offers. Also under discussion is mandatory training for staff to help them recognise underage customers.

The British Beer & Pub Association (BBPA) was quick to point out that it is currently illegal for trade associations to enforce agreements on promotions across the sector. This was borne out this week when it emerged that the BBPA had quietly written to members four weeks ago informing them that even its voluntary codes were contravening EU competition law.

But talk of yet more legislation is another blow for an industry already reeling from the drop in consumer spending, fallout from the smoking ban and an above-inflation rise in beer tax.

Mark Hastings, director of communications at the BBPA, said there were plenty of laws to combat problem drinking.

"The laws that pubs are expected to abide by enable authorities to tackle any pub that is causing problems in the community," he said. "You can take very specific action against licensees. It is very difficult to say what more powers the Government needs."

Fair representation?

Paul Smith, executive director at late-night trade body Noctis, questioned KPMG's research methodology, warning that visiting just 597 licensed premises did not create a fair representation of the on- and off-trade. "There are 141,000 licensed premises in the UK and you would have needed to visit 5% to see the scale and trends," he said. "We cannot have a consultation based on the assumption that we take this as gospel."

The Association of Licensed Multiple Retailers (ALMR) joined in with the criticism, claiming the report was designed to appeal to those members of the public who believed that pubs and bars were full of irresponsible, binge-drinking louts, rather than an industry that has refused one million underage sales in the past year.

But while the industry is no doubt grateful that its trade associations are standing up for licensees, there are fears that the complete dismissal of any criticism could be counter-productive.

Not so, said Kate Nicholls, ALMR head of communications, who insisted that the industry was right to attack the Government and the KPMG report in particular for its findings, as it had to make its feelings known ahead of the three-month consultation process.

"If we do not engage with the Government and walk away, we will hand the initiative to our enemies on a plate," she said. "Then they will enforce very tight legislation on us. The Government has made so much noise that something will happen, and even if there were a General Election there would be no guarantee that the Tories would be any more favourable to the on-trade than Labour."

Loss-leaders?

Nicholls added that ALMR members remained deeply concerned about supermarkets selling alcohol as a loss-leader, a view backed by Ted Tuppen, chief executive of Enterprise Inns, last week.

"We call into question the strategy of the major supermarkets, some of whom continue to use alcohol as a traffic builder - often selling multi-packs at below cost into a marketplace where consumption is almost entirely unregulated," he said. "In the absence of responsible retailing, we would expect the Government to introduce sensible legislation to address this issue."

The KPMG report did not cover the issue of price this is currently being analysed for a study by the University of Sheffield, due to be published in the autumn. It is hard to imagine that much progress will be made on promotions without the spectre of prices being raised.

Until then the pub trade can expect pressure from the Government, who in turn can expect to face the continuing wrath of the pub trade. It is unlikely that this stalemate will produce a result either party is happy with.

The Pub trade in figures

• 4% of pubs refused to serve drunken customers
• 6% promote sensible drinking on the premises
• 27% of pubs were visited by customers under 18
• 18% of pubs served "obviously under-age customers"
• 1 pub found selling a cocktail called Liquid Cocaine

Source: KPMG/Home Office survey of 597 licensed premises

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