It won't be long before Ireland gets its first £5 million pub. It might even happen this year, but whenever it happens, the pub crossing that latest remarkable price threshold will be in Dublin.

The guarantee that Dublin will be its home comes from the way that pub licensing is controlled. The highly restrictive regime dates from 1902 and has a profound impact on the value of licences in Dublin compared with anywhere else in the State and also affects the price of a pint - drink costs on average between six and 10 per cent more in the capital.

The pricing issue, and alleged anti-competitive activities by the licensed trade flagged in last autumn's highly critical Competition Authority report on the industry, would seem to demand quick action on the part of the Department of Justice which is responsible for legislation. Instead, there has been a succession of pronouncements on how long pubs should remain open, the possible scrapping of the summertime/wintertime differential and how long drinking up time should be.

These may be acted upon soon but the more important issues raised by the Competition Authority and the report's main author, William Prasifka, are coming much more slowly. Changes in these are likely to have a greater impact on the price of a pint - on average 25p dearer in Dublin than in rural areas - than adjusting antiquated pub opening hours.

Pat Rabbitte TD asked the Minister for Justice, Mr O'Donoghue, in the Dail about changes in licensing and opening hours earlier this month and similar questions on opening hours were raised in the Oireachtas in February by Michael Creed and by Michael Ring.

Mr O'Donoghue confirmed that, as he had already informed the house, "a review of the licensing laws is currently taking place in my Department and that it is my intention to bring forward the Heads of a Bill for the Government's consideration at the earliest possible opportunity this year". The review, he added, included the issue of opening hours.

The Competition Authority report has the unwieldy title of "Interim Study on the Liquor Licensing Laws and other Barriers to Entry and their Impact on Competition in the Retail Drinks Market". It was very much to the point, however, in raising what it said were widespread anti-competitive effects on the trade.

The authority took submissions in the spring of 1997 and conducted oral hearings. It published its report on September 23rd, 1998, but not before it had initiated proceedings against the Licensed Vintners' Association, which represents almost 700 of Dublin city and county publicans and the Vintners Federation of Ireland, which represents about 6,000 publicans outside of Dublin.

The authority took the action in the first week of June last year. It said the proceedings were "grounded in actions prohibited by Section 4 of the Competition Act". These proceedings were "pending", a spokeswoman said last week. The authority also indicated, in light of the proceedings, it was publishing its report as an "interim" report.

However, it packed plenty of punch for an interim report. It found that "the liquor licensing laws, as currently constituted, are a formidable barrier to entry into the retail drinks market". It found "substantial empirical evidence of the distorting effects of the licensing laws on competition". The net effect, it said, was large price differentials between Dublin and rural pubs.

It highlighted the fact that Dublin has 29 per cent of the State's population but only nine per cent of its pubs. Conversely, there were large numbers of pubs in rural areas where there were falling populations. The number of people per pub in Dublin in 1996 was 1,119, the report stated. By contrast, in Mayo there were 179 people per pub, 148 in Leitrim and 273 in Westmeath. The State average per pub was just 362.

It made particular play of the imbalances in some of Dublin's larger suburbs. Tallaght has a population of about 62,000 with 20 licensed premises, which gives 3,100 people per pub. Limerick City has a population of 52,000 people but with 200 pubs has only 260 people per licensed premises.

The result, the report noted, means that Dublin pubs can achieve massive turnovers, making their licences very valuable. Along with annual pub turnovers well above the £1 million mark, the licensing system also guarantees spectacular prices for some pubs. The current record holder is the Sheaf O'Wheat, near Coolock, Dublin, which was sold last October for £4.75 million. The Clonsilla Inn followed close behind. It was sold that same month for £4.4 million.

"The combination of all these factors and the fact that they are all subject to a single interpretation, makes for a compelling body of empirical evidence that the licensing laws significantly distort competition," the report concludes.

It is now up to Government to decide what it should do about the laws, according to an authority spokeswoman. "The authority would have made recommendations in the report and now it is up to the Department to make decisions," she said. "Our job is to make recommendations and it is for others to act on them."