We don’t need happy hours…we need a new booze law

Wednesday 26 August 2020

Happy hours and pub promos won’t help the beleaguered hospitality industry through the pandemic – but a replacement for the island’s 46-year-old booze law will, according to the head of a major pub chain.

The comments from Randalls CEO Gavin Reid came in response to two recent proposals from Deputy Linsday Ash, who ran his campaign with the slogan ‘Get on the L.Ash’, to make drinking cheaper for islanders.

The first would allow bars and pubs to offer ‘happy hours’ and ‘buy one get one free’ deals.

The second, published just last week, is asking for pubs to temporarily be allowed to run promotions on drinks – something not possible under the current Licensing Law – to stimulate the covid-hit economy.

Pictured: Deputy Lindsay Ash believes the hospitality industry should be able to offer promotions until the end of 2021. 

Deputy Ash, who is an Assistant Treasury Minister, is also calling for a competition review of industry prices and for politicians to have more say over policies around alcohol, rather than those simply resting with a panel of jurats known as the Licensing Assembly. 

But Mr Reid says the push for promotions on drinks could actually end up damaging the hospitality industry, rather than helping it at a time when it most needs support.

The CEO of Randalls, which runs more than a dozen pubs and eateries in Jersey, told Express he fears the proposals would lead to a “race to the bottom”, squeezing profit margins.

“We’re a very close island – a lot of our outlets are in town are very close to each other and competition is very close to each other. If, for example, Chambers decided one day to offer pints for £3.50, the Royal Yacht could turn around and go to £3.25, then we’ll offer £3.00.

It will just be the quickest race to the bottom – you end up discounting your products so much so that it’s not cost effective.

“All you’re doing is getting volume in for no profit at all – you’re not covering your costs,” he explained, noting that the law already prohibits premises from being more than 10% cheaper than competitors within 100m.

Pictured: Randalls' CEO says pub promotions could actually be unhelpful.

Mr Reid continued: “What people have to remember is we have to physically bring the beer here, we have to send back the empty kegs, the cost of living here is higher. You’d also like to think that in a pub, it’s air-conditioned, there’s music, we have to pay performers. There are a lot of hidden costs that the consumer doesn’t see. 

“By the time you factor that all in, we’re not making a lot of money which a lot of people think, so for us to start discounting our prices further is only going to have an impact on profitability.”

While he said that he would be “more than happy” to comply with a price review by JCRA if Deputy Ash’s proposal succeeds “provided that there is no cost to the outlets”, he said that he didn’t understand the necessity for it.

He added: “I’m quietly confident you won’t find we’re profiteering or anything else – by the time you’ve looked, you’ll have found the cost of living in Jersey, duty, getting the product to Jersey, and actually cost of getting glasses, you’ll actually find we’re quite competitively priced in comparison to the UK.” 

A better area of focus, Mr Reid argued, would be to examine whether the continued increases of alcohol duty are actually productive from a public health viewpoint. 

“What has happened to that increase in duty? I’ve not seen any initiatives to help reduce drinking consumption. If alcohol is such a bad thing, why is there a duty-free allowance?... All they’re doing is penalising the responsible drinker.”

Pictured: Mr Reid said he wasn't certain that consistent alcohol duty rises had been beneficial from a public health perspective.

Above all, however, he says politicians’ priority should be to replace the “outdated” 1974 Licensing Law, which governs how licensed premises operate in Jersey. 

“It’s 46 years old… If you think how many detrimental changes have happened in our industry, I think it’s quite appalling that it’s been attempted now on three, possibly four occasions, where we’ve been consulted, offered our views, which have been passed along, and then there’s been a change in Ministers or the civil service and it’s been pushed aside.” 

Currently, licensing decisions are taken by a panel consisting of the Bailiff and jurats known as the Licensing Assembly. Many industry representatives argue that their role effectively sets policy for alcohol consumption in Jersey and that this should instead be carried out by elected or independent representatives.

Mr Reid also pointed out that the current category system gives rise to unusual circumstances whereby islanders must leave premises like Chambers at 23:00, but can “walk down the road” and find somewhere else to sit and drink that operates a different licence.

Those categorisations also pose difficulties for families. Outlets with a ‘Category 1’ licence can welcome children under 18 to enjoy an evening meal with their families at 20:00, but they must be off the premises by 21:00 under the rules.

Senator Steve Pallett - whose responsibilities as Assistant Minister span Health and Economic Development - agrees that updating the Licensing Law must be prioritised. 

However, he says he is concerned that Deputy Ash’s push for drinks offers will be “counter-productive, and only lead to more consumption”. 

Pictured: Assistant Minister Senator Steve Pallett, who previously worked on a new Licensing Law.

While he recognised Deputy Ash’s aim was to provide a short-term boost to the economy, he said that the Health Department may end up “having to pick up the pieces”. 

“You also have to consider some of the social aspects, like domestic abuse,” he noted. 

Senator Pallett spent the previous States Assembly term working on creating a new “fit for purpose” Licensing Law, which aimed to remove barriers to the hospitality industry and boost its activity, while also minimising crime and disorder and protecting the public from harmful levels of alcohol. 

It also included overturning the Licensing Assembly and replacing them with an authority made up of seven States Members – though some suggested independent ‘laypeople’ would be a better alternative to avoid any potential conflicts of interest. 

Debate on the law was due to go ahead shortly before elections in March 2018, but it was scrapped at the eleventh houramid pressure from Ministers who felt there hadn’t been enough consultation. 

While Senator Pallett retained a Ministerial role following the elections, he said that resources for continuing to shape the booze law had run dry.

He also said there didn’t “appear to be the political will to do it”. 

While he said he was “disappointed” with Deputy Ash’s proposals overall – particularly as he hadn’t asked those that had previously worked on the new law for advice – he said he was glad to see the matter put back on the political agenda. 

“If it goes through, it will focus the government’s mind to put something in place. There needs to be a commitment from the Council of Ministers that this is a priority area,” he said.

He noted that the shelved draft law, in his view, remained “good to go” – the only matter needing to be ironed out would be the make-up of the group replacing the Licensing Assembly.

Senator Pallett said that he felt an in-committee debate among States Members would be a good step forward for shaping the future of the law, and trying to create a proposal that will allow the industry to “thrive” again post-covid.

Meanwhile, Ministers are continuing to consider whether hospitality industry should receive targeted support as it faces “three winters” in a row due to the impact of the pandemic on visitor numbers. 

The industry has been able to benefit from the co-funded payroll scheme, which has seen the Government pay 80% of an employee’s wages up to £1,600 per month in hard-hit businesses, but this is gradually being phased out from September until March.