Head of drinks trade inquiry calls for easier licensing

THE chairman of the Competition Authority inquiry into the drinks trade has signalled his support for making it much easier to get a public house licence.

"I see no need to stop someone selling drink as long as they get planning permission to do so, comply with the rules on opening hours, and are hygienic," Prof Patrick McNutt said.

He said he knew no reason why opening a new pub in Dublin should not be similar to opening a restaurant. Prof McNutt said compensation for pub owners whose premises fell in value as a result of any changes in the law would be among the issues to be considered by his inquiry, announced this week.

The recent public controversy over the price of drink in Dublin pubs had caused him to decide to investigate the licensing trade.

"It was a market we were always wanting to study," he said. "Because of the recent controversy we decided to do it sooner rather than later." The authority is to investigate if controls on opening new pubs are a "barrier to entry to the market, reducing competition.

Any move to make it easier to open new pubs in Dublin would have a downward effect on the value of existing pubs. A number of Dublin pubs have sold for more than £2 million in recent months, and auctioneers say price increases over the past few years have mirrored those of residential property in Dublin's more fashionable suburbs.

Prof McNutt said the authority will consider whether there are any constitutional issues arising out of changing the law in a way that would affect the value of publicans' premises.

Dr John Fingleton, a Trinity College economist, said he would be "very surprised" if the Competition Authority did not decide in favour of opening up the licensing system.

He suggested that publicans who paid high prices in recent years could be compensated by being given a second licence which they could then sell. Other publicans could then, a few years later when the value of Dublin licences had fallen, be given second licences.

"Then, say six years after that, anyone who complies with the regulations and pays an administration fee of a few thousand pounds, should be allowed a licence."

Mr Frank Fell, chief executive of the Licensed Vintners' Association, said people did not necessarily consider price when going for a drink in a pub.

In new suburban areas of Dublin, where a solitary pub might be servicing a large population, pubs charged less than did their counterparts in the city centre where there was huge choice, he said.

"Customers don't shop around pubs in the way that economists think they do," he said.

Mr Fell said the value of regulation had been proven. "You'd be hard-pressed to find a restaurant in Dublin opened more than 20 years. You have to ask whether that sort of instability is desirable as far as the sale of alcohol is concerned."

Mr Fell said the high value of licences meant pub owners took their responsibilities very seriously.