E-Malt.com News article: United Kingdom: Scottish pubs see last chance in hot summer, S&N managing director believes the UK’s beer industry is on the brink of an epochal change

Operators of Scotland's licensed premises are grasping at hopes of a long, hot summer to stave off an industry meltdown, as the stampede out of Scotland's pub trade continues, the Sunday Herald posted on May, 11.

At present, nearly 20% of Scotland's pubs and bars have not yet registered for new liquor licences which come into effect in 16 weeks' time.

As bar and pub owners complain that too much of the blame for the nation's binge-drinking culture has been laid at their saloon doors, stringent new licensing measures, which come into force on September 1, have placed excessive financial burdens on bar owners.

"The new regulations were intended to be less bureaucratic but they have placed tough new conditions on owners at a time when the economy is facing a major downturn," said Patrick Browne of the Scottish Beer and Pub Association. He said that 65 Scottish pubs have closed in the last six months, amounting to about three pubs per week.

"Basically, one in five of Scotland's pubs and bars have not yet lodged applications for new licences; the drop-out rate of existing licence-holders is alarming," he said.

The news comes as Jeremy Blood, managing director of S&N UK, said in a recent interview that the UK's beer industry was on the brink of an epochal change, with the entire industry bracing itself for a significant transformation.

"We shouldn't underestimate the structural change that will drive UK brewing," said Blood. "It will tip to being more than 50% in the off-trade - that's the supermarkets and corner shops rather than public houses - and that will be a symbolic moment for the industry. So many of the rules and regulations on how things are done come from our pub heritage, but pubs will be less than half of the business. It will mean we will have to change what we do as major brewers."

Paul Waterson, head of the Scottish Licensed Trade Association, which represents thousands of on-trade pubs, hotels and restaurants in Scotland, says the landscape has been unfairly skewed towards the major supermarkets.

"The local pub is an intrinsic part of our Scottish life but it is being slaughtered. It is very unfair that the big supermarkets can sell alcoholic drink so cheaply while properly-run pubs are now struggling to survive. More people are buying cheap drink off-sales and we need minimum pricing on alcohol to bring stability.

"The average licence fee for a pub now costs around £1000 and that doesn't include all the extra costs, such as staff training that's now required."

Measures taken by the justice minister Kenny MacAskill have also doubled the amount of liquor licence fee revenue to be collected by local authorities from £10 million to £20m. Scotland's licensed bars and hotels, which already contribute an annual estimated £150m to the country's coffers, also face further charges on local council rates. Pubs are uniquely charged on their turnover and square footage rather than the rateable valuation of the property.

Waterson said: "This means that publicans face a 9% local tax on turnover. This might have been understandable many years ago when the industry was in good health, but now it is onerous and a threat to the pub's survival.

"Less beer is being sold in the UK than at any time since the Depression in the 1930s. Across the UK, 36 pubs a week are closing while the smoking ban has had a massive impact and recent excise duty rises have hammered margins."

Meanwhile, local council authorities are showing little concern for the plight of Scotland's pubs. Browne says that the licensing regime has cost the pub industry £18m in extra charges in the last 18 months, because premises have had to employ consultants and architects to change or modify their premises.

For example, Glasgow City Council has raised £1.5m from fees for liquor licensed premises applications in Glasgow, yet the cost of implementing such licences to the council was less than £1m. "There was a surplus of £522,000 from the registration of bars, hotels and pubs, but there is no rebate; this has simply disappeared into the council's surplus. It's another way to make pubs fork out," said Browne.

The 2005 Licensing (Scotland) Act will replace the 1976 Licensing Scotland Act. Many of its changes have been driven by the need for Scotland's pubs to put their houses in proper order and to tackle the country's alcohol problem. The new laws will introduce a twin licensing of both premises and those running the bar, the introduction of liquor licensing officers with stronger powers, and tighter rules for pubs and clubs selling alcoholic. The act will bring in compulsory training for staff and a No Proof, No Sale' sales culture to stop under-age drinking.

Waterson said: "We are very supportive of all the licensing changes and we've been co-operating with the local authorities to make this work successfully. But we need to be given some recognition that cut-price drink sold in supermarkets is now a bigger issue to binge drinking than just our pubs and clubs. The industry needs every bit of help we can get, be that a long, hot summer or legislation on minimum pricing for alcoholic drink."

Last week, the Met Office issued a forecast that Britain would see an extended period of warm weather over the summer months.


13 May, 2009