The Nicholson Committee: Review of Liquor Licensing Law in Scotland
CHAPTER 12
IRRESPONSIBLE PROMOTIONAL ACTIVITIES
The nature of the problem
12.1 In Chapter 2 above 1 we have drawn attention to concerns which have been expressed to us in relation to so-called binge drinking. That is the name given to the practice of drinking very substantial quantities of alcohol within a very short period of time. There is evidence that the practice is particularly common among people under the age of about 30 of both sexes, and it has been represented to us by many consultees that it is actively encouraged by a small number of bars and night clubs which engage in deep price discounting and other promotional activities of an irresponsible kind.
12.2 The dangers associated with excessive drinking within a short period of time are well-documented, and we have already detailed some of them in Chapter 2 of this Report. Not only does excessive drinking of this kind have potentially harmful effects, sometimes of a serious kind, for the health of those who engage in it: it can also frequently be a trigger for behaviour which is entirely undesirable and unacceptable for the community at large, and in particular for those who live close to, or in the vicinity of, the licensed premises concerned. It can lead to violence and public disorder, and, at a lesser level, it can give rise to excessive noise and disturbance to the detriment of local residents.
12.3 In our view there can be no doubt that promotional activities of a kind which may have undesirable consequences do exist, at least in the case of some establishments. We have received a considerable amount of evidence to that effect from many of our consultees, and we have seen some evidence of it with our own eyes. We have seen, for example, posters placed on lamp posts and walls close to University and other buildings which advertise the availability of alcoholic drinks, often for prolonged periods, at prices which are significantly lower than is normal in licensed premises. Posters placed by some night clubs sometimes indicate that, if an entry fee of around 10 is paid, there will then be an unlimited, free, supply of alcohol for the next five or six hours. In at least some cases which we have seen such posters contain explicit illustrations suggesting that various sexual pleasures may also be available.
12.4 All of this is at the very least distasteful. More importantly, however, publicity material of the kind which we have just been describing adds ample support to the evidence given to us by consultees to the effect that some establishments appear to be willing to indulge in extreme promotional activities in order to attract customers regardless of the consequences which that may have both for the health of those very customers and also for the wider public interest in terms of public order and amenity. Given our terms of reference we are in no doubt that this is a problem which must be addressed.
Our approach to the problem
12.5 In setting out our approach to the problem which we have outlined above we must begin by stating quite clearly that, so far as we are aware, it is one which arises only in respect of a relatively small number of establishments. We for our part have no fundamental objection to price discounting, and price promotions, in principle. We are aware that some public houses offer a brief 'happy hour' early in the evening in the hope of attracting some extra customers at a time when business might otherwise be slack; and we are also aware that some off-sale outlets will from time to time offer a discount on certain products - for example, six bottles of certain wines or champagnes for the price of five. We recognise, of course, that any kind of discounting of the price of alcohol may lead to a certain level of increased consumption; and no doubt that is likely to be one factor giving rise to the increase in alcohol-related illnesses which we described in chapter 2. On balance, however, we have no major concern regarding promotions of that kind. They are consistent with the whole concept of free competition between traders and, more importantly, there is absolutely no evidence to suggest that they bring about any of the undesirable consequences which are associated with the kinds of promotional activities which we have described earlier in this chapter. Indeed, in many instances modest promotions of the kind just exemplified are conducted in accordance with responsible guidance offered by a variety of trade associations. 2 Such guidance stresses, among other things, the need for good management, and it highlights the dangers associated with excessive drinking. We are firmly of the view, however, that grossly irresponsible discounting and other promotional activities which simply encourage binge drinking, with all of its undesirable consequences, must if possible be controlled in the public interest.
12.6 In that context we are aware that in recent times at least two licensing boards (South Ayrshire, and Perth and Kinross) have attempted to tackle this problem by negotiating an arrangement with late-night club operators whereby, in return for an agreement on the part of the operators to maintain the minimum prices for alcoholic drinks at a level which does not encourage excessive consumption, the licensing boards have undertaken to maintain the current extended hours under which those operators conduct their respective businesses. While the foregoing arrangements appear to be working in practice some commentators have expressed the view that they may be open to challenge on the basis that, by having a fixed minimum price agreement between operators, there may be a breach of both UK and European competition law. The Competition Act 1988, which applies throughout the United Kingdom, and which is modelled on Article 81 of the EC Treaty, in effect prohibits price-fixing agreements.
12.7 We, for our part, offer no view on the legality or otherwise of the schemes which have thus far been introduced in Scotland in order to address the so-called 'happy hours' problem. On the assumption, however, that those schemes are not challenged, or that they survive any such challenge, we see no reason why they should not be continued, and indeed replicated in other areas; though they would, of course, require some modification if effect were to be given to our proposal that the present system of permitted and extended hours should be replaced by a system of opening hours authorised by licensing boards. We tend to think, however, that, with the support of appropriate legislation, it may be possible to provide a further method of dealing with the problem in a manner which is unlikely to lead to any challenge.
12.8 Our starting point has been to consider whether legislation might prescribe a standard condition for all premises licences which would impose a duty on the licence holder to refrain from irresponsible promotional activities, and which would authorise licensing boards to take appropriate steps against operators who, whether by discounted prices or otherwise, conduct their business in a way which is potentially or actually prejudicial to the "licensing principles".
12.9 It seems to us that it would be entirely consistent with the foregoing that there should be a standard condition attached to all premises licences to the effect that nothing must be done in connection with the business of the premises, whether by way of promotional advertising, by way of offering discounted prices, or in any other way, which encourages excessive consumption of alcohol and which thereby prejudices, or is likely to prejudice, the "licensing principles". We recognise, of course, that the phrase "excessive consumption" is somewhat vague, but we doubt whether it is possible to be more precise and, since circumstances are likely to vary from establishment to establishment, we consider that this is a matter which must simply be judged on the facts and circumstances of particular cases. It might also be made a feature of such a condition that all licensed premises should display in a prominent place a prescribed minimum amount of material promoting sensible drinking, and that reasonably priced non-alcoholic drinks should be readily available at all times. Such a condition would not, in our view, operate in restraint of trade, and we believe that it would be seen as wholly acceptable by the majority of licensees and members of the public. However, it would not be sufficient simply to have such a condition attached to premises licences. There would also have to be a means whereby a licensing board could take appropriate enforcement action in the event of it being brought to their attention that the condition was not being observed in particular premises. We consider that that could be done under the general procedure which we have earlier recommended for dealing with breaches of licensing conditions. 3 We accordingly recommend:
58. (a) There should be a standard condition attached to all premises licences to the effect that nothing must be done in connection with the business of the premises, whether by way of promotional advertising, by way of offering discounted prices, or in any other way, which encourages excessive consumption of alcohol and which thereby prejudices, or is likely to prejudice, the licensing principles. Such a standard condition might also require that a prescribed minimum amount of material promoting sensible drinking should be displayed in a prominent place in all licensed premises, and that reasonably priced non-alcoholic drinks should be readily available at all times.
(b) Where an apparent breach of the foregoing condition is brought to the notice of a licensing board, and it is satisfied after a hearing that the breach has been established, it should be entitled to impose an appropriate sanction having regard to the need to promote the licensing principles.