Ban on Pubs & Bars Selling Below Cost Alcohol

The Government has introduced a ban on the sale of alcohol for less than cost price, which will come into force in England and Wales in April 2012. The cross party consensus is that cut-price supermarket booze is a public order issue, is damaging to the nation's collective health and is also damaging the UK Pub Industry.

A minimum resale price of 50p-per-unit minimum was backed by health campaigners and might have levelled the playing field; corner shops and pubs may once again be able to compete with supermarkets on off-premises sales. The proposed ban is based on a duty plus VAT rate, which sets the minimum cost for alcohol as follows; £10.71 for a litre of vodka 38p for 440ml of lager 40p for a litre of cider.

Licensing Legal is a boutique firm of licensing lawyers and solicitors, headed up by, Anthony Horne, who has over 30 years' experience in the field of liquor, entertainment and gambling licences as well as connected regulatory matters.

''There is little known about the implications of the below-cost alcohol ban. As with most new legislation the outcome can only really be assessed once it becomes a reality. Speculation is rife as to what effect this will have; the honest answer is that we simply don’t know,' said Anthony Horne, Director of Licensing Legal who is listed in the Legal Experts 2011 guide.

''It is probably realistic to say that the ban will have little impact on most pubs and bars; and it is doubtful that it will go far enough to ensure that supermarkets raise their prices and level out the playing field for their competition. Representatives of the ‘on’ trade specifically have called for more support to be offered to pubs by raising the price even further so that they can compete more fairly,'' he reported.

The minimum rate and further reductions in the cost of supermarket alcohol is unlikely to help the UK Pub industry. Publicans have learned in the last few years that they need to diversify their business in order to survive. However, their core business remains alcohol sales and the Government's proposed minimum prices were far below what they had to charge to generate a profit.

Paramount Investments are specialist commercial estate agents offering pubs and public houses for sale throughout the UK. Steve Oliver, Sales Director at Paramount noted that, ''6 pubs are closing down a week because they cannot hope to match the prices charged by supermarkets. In 2011 we exchanged contracts on 208 pubs up from 202 the previous year. Many of these properties were for sale at below market value as breweries and pub companies wanted to cut their losses on run down, strugling, empty or vacant pubs and public houses.''

''Property developers are choosing to invest their money in these derelict pub sites and sadly many of these pub properties have been sold as property development sites with planning permission for change to 'residential use' from 'A4 use' as a drinking establishment. While changes will be welcome news to the pub trade which struggled during 2011 but successful publicans must capitalize on any benefit and strive to keep customers when they re-emerge in 2012.”

“Successful pubs must offer something extra - music, darts, pool, live music to other forms of entertainment. They must offer a clean vibrant atmosphere or image and serve good home-cooked food at affordable prices - it is essential they make the most of any opportunity they are given to recapture a share of the market-place.”