Town Centre Licensed Premises Reviews

Briefing Note

August 2009

OLDHAM TOWN CENTRE LICENSED PREMISES REVIEWS

The purpose of this briefing note is to provide information on the decision by Oldham Council's Trading Standards Department to instigate a review of the premises licences held by 22 premises in Oldham Town Centre. This briefing note is only intended to give a headline brief and to dispel some myths that are circulating about the reviews.

In December 2008, the Council became aware of heavily discounted drinks promotions in Oldham Town Centre. Over the following 6 - 8 weeks, the drinks promotions intensified up to the last week in January 2009, when Oldham Town Centre was featured in national media after one bar ran a £5.99 unlimited drinks promotion. Although one particular bar was featured, this promotion was typical of promotions operating at the time. During January 2009, bar operators discussed with officers, through PubWatch, the concept of developing a minimum price agreement. However, officers advised that this would be a Chapter 1 prohibition under the Competition Act 1998 and illegal.

In response to the proliferation of these promotions, members sought views about banning them. Officers reported that the Council had no powers to ban the promotions. At that point, Home Office Ministers went on television to state that `they had given local authorities powers to ban these promotions, they should get on and use them'. Officers sought legal opinion and guidance from LACORS about this, but concluded that there were not powers to ban drinks promotions.

Instead, the Trading Standards Department suggested that operators dropping below threshold prices should see an increase in operating costs as a disincentive to heavy discounting. This could, in effect, achieve higher prices without banning lower price promotions. The concept put forward was that conditions for operators offering cut price drinks should seek to slow down the rate of drinking and increase the protective resources available at that location.

The threshold was agreed based upon British Beer and Pub Association guidance on irresponsible drinks promotions and a price threshold at 75p per unit of alcoholic strength. Premises were selected on the basis that they were within the Town Centre environs and they were engaged in drinks promotions that would trigger the threshold (even if only on a few products). A total of 22 premises (out of 32 in the Town Centre) were subject to formal reviews.

Myths

Blanket Review - It has been reported that this is a blanket review. This is not the case. Very carefully, the Trading Standards Service has set out the factors relevant to each individual premises together with the cumulative impact on the Town Centre as a whole. Greater Manchester Police have supported this with direct evidence relating to each premises. Whilst it is true that the Council was seeking to tackle similar problems at multiple premises at the same time, it is not the case that this amounted to blanket review. The Licensing Committee have considered each individual application on their own merits. This is particularly evidenced by the Committee's decision to reject the evidence offered in one case (against the Old Mess House) as insufficient evidence of price promotions that trigger the threshold.

Illegal Act - It has been reported that the Trading Standards' actions are illegal. Obviously this would be a matter for the courts, but it is interesting to note that no-one has sought judicial review of our actions. In addition, the Council has taken careful legal advice from two leading barristers (one a specialist QC in Licensing Law, the other a specialist barrister in administrative law) on its actions. The Council considers that it has acted fully within its powers.

Competition Breach - It has been reported that the action is a breach of competition law. It is the Council's view that to attempt to do this voluntarily would, indeed, be a breach of competition law. However, by using a regulatory tool to mandate conditions, the Council believes that the action is exempt from competition law (cf Sch. 3, Para 5, Competition Act 1998).

Minimum Pricing by Back Door - The Council is of the view that minimum pricing for alcohol would be desirable, but recognises that Parliament has not yet passed legislation to that effect. The proposals brought by the Trading Standards Department require careful reading. The proposals do not set a minimum price, but they do add cost to operating at prices below a certain threshold. This gives bar operators a choice and it may still be economically advantageous to operate at prices below that threshold if a bar can attract enough customers to make that worthwhile. The Council accepts that is probably unlikely given the current market conditions.

Disproportionate and Unreasonable - The trade have been particularly arguing that the action taken is disproportionate and unreasonable. This was the subject of very careful consideration by the Council before commencing this action. Although the decision to act was taken by the Chief Trading Standards Officer using statutory powers, it should be noted that the decision was approved by both the Chief Executive and the Leader of the Council and was considered by the Executive Management Team, Borough Solicitor and all leading elected members of the Council before acting. A serious threat to public safety, crime and disorder had emerged through the promotions, including a rapid and significant increase in serious violent crime in the first four months of the year. The Council therefore argues that its action is both proportionate and reasonable.

Contrary to Guidance and Policy - The Council considers that the Statutory Guidance under s.182 of the Act is ambiguous in this respect, with sections tending in favour of the action and others tending against. Of course, the trade highlight the sections tending against, but it is clear there are significant arguments about the Guidance. In addition, we have had various `interpretations' of Guidance quoted at us which, in our view, stretch the wording of the guidance, give the guidance greater status than it is given by law, guild the guidance with additional words that are not there and rely upon apparent `understandings' between the trade and Government that are not actually expressed in words. The Council has been concerned that many of the assertions that have been made are, in fact, just someone's belief of what they think the Guidance or Act ought to say or, some cases, are just the `way in which its always been interpreted'. Our challenge to that is `Why?'

Blocking Best Bar None - The Council and Police proposed Best Bar None for Oldham in 2004, but the idea was rejected by the trade in the Town. Instead, they asked the Council to develop a simpler scheme, which we did (called PubSafe), but this has failed to be adopted by the trade either. The trade bodies have now proposed Best Bar None again, which both the Council and Police are supportive of. However, we are yet to be convinced that the actual operators in the Town, as opposed to their trade body, actually support it.

Post Office Queues - This aspect of the review application has generated the majority of media attention. The Licensing Act processes require an applicant for review to propose specific conditions they are seeking on the premises, rather than simply the overall objective of the review. The post office style queue was included for this purpose, but we have made clear from the start to all of the operators that we would give consideration to alternative methods of achieving the objectives of slowing down consumption and increasing protective resource. Some operators have put forward acceptable alternatives.

Supermarkets - It has been widely reported that the action taken is unfair as the real problem is with supermarkets. The Council is very concerned about the pricing and promotion of alcohol in supermarkets and is currently actively considering options for tackling this problem. The Council accepts that there is an issue with pre-loading, but does not accept that this absolves Town Centre bars of responsibility - particularly as it is an offence to serve someone who is drunk.

Latest Position

The latest position, including access to all of the agreements reached and actions before the Licensing Committee can be found at www.tradingstandards.gov.uk/oldham.

12/08/09

Application Details

The following is the full text of the original application for review:

Premises Subject to the Application for Review:

Grounds for Review:

The Trading Standards Department of Oldham Council has submitted the following grounds for review:

This application for review is brought by the Local Trading Standards Authority (weights and measures authority) as a responsible body under the Licensing Act 2003.

The applicant contends that:

The applicant accepts that:

This application for review is not seeking to ban or prohibit these promotions, although both the applicant and the responsible drinks trade strongly discourage their use. However, the applicant is seeking to ensure that, if such promotions are run, adequate provision is made to ensure public safety, prevent public nuisance and prevent crime and disorder associated either directly with the drinks promotion or through its contribution to increasing the overall levels of alcohol consumption by a fixed number of people entering a defined area - the Town Centre late night venues.

In particular - the applicant seeks to achieve two outcomes with its proposed conditions:

The applicant recognizes that the proposals have cost implications for premises licence holders, which may have a distorting effect on the operation of the market place for Town Centre late night venues. It is therefore proposing that identical conditions be applied to those premises to prevent market distortion and one premises potentially gaining a cost advantage over another.

The applicant considers that premises licence holders need to have additional cost, operational and logistical factors to consider prior to embarking on an irresponsible drinks promotion. At present, a licence holder has no disincentive, other than reputational, not to engage in irresponsible drinks promotion. Often these decisions are driven out of necessity for survival as one of the competitor locations operates a promotion. Very quickly, therefore, a situation can arise where drinks discounting or promotions spiral downwards creating a self-fulfilling cycle of events. The applicant will present evidence of this happening during the later part of December 2008 and early January 2009.

The applicant, in partnership with Greater Manchester Police, will also present evidence of the indirect and direct cumulative impact these promotions have on the levels of public nuisance, crime and disorder and the effects on public safety during this period.

The applicant has taken into account a broad range of published material on reaching a set of proposals to tackle this problem. These include:

The applicant is particularly concerned with drinks promotions that occur when there are the most people within the Town Centre late night drinking venues. The applicant accepts that, at quieter times - particularly where the cumulative impact is lower - drinks promotions may be more extensive, although they should still be responsible. The applicant is therefore only proposing that the additional conditions apply to promotions between 21:00 hrs and 05:00 hrs. This would not, for instance, affect a `happy hour' promotion between 7pm and 9pm.

The applicant considers the following examples to be irresponsible drinks promotions. In reaching this conclusion, the applicant has taken into account the industry's own guidance on what is and is not a responsible drinks promotion.

The applicant accepts that none of the above practices are unlawful, but the applicant contends that they are irresponsible in the specific circumstances of alcohol supply at late night Town Centre venues.

If such promotions are to run, the applicant seeks conditions on the licence to slow down the rate of drinking. Depending upon the type of promotion being run, this may have the effect of reducing the cost of the promotion to the licence holder. The applicant seeks to achieve this by restricting access to the bar area(s) within the premises. The licence holder would be required to operate a `post office' style queuing system for the bar, ensuring that no one was drinking whilst in the queue and that the numbers of purchases were restricted. This will have the effect of significantly slowing alcohol consumption.

In addition, the licence holder would need to employ additional door supervision staff to ensure that proper order was kept, both at the bar queue and in the general environs of the premises. The applicant recognizes the limited powers that door supervisors have to deal with particularly unruly clients and is therefore requiring that two additional police officers be assigned to the bar or club for the duration of the promotion (i.e. when the business is open at the hours covered and the promotion is running). Arrangements will have to be made between the licence holder and Greater Manchester Police to facilitate this. GMP will charge the licence holder for this service at their standard published rate.

Circuit drinking (where each Town Centre reveller visits a series of bars during the evening) has a cumulative effect that all Town Centre bars and clubs need to take responsibility for. Those that engage in irresponsible drinks promotions are undermining the efforts to maintain order in the late night economy. These proposals are designed to alleviate the competitive pressures on bar owners and strike the right balance between regulation and the free market to ensure public safety.

As drinking gets later, the problems get worse and the resources required to deal with them increase. The police have a key role to play in ensuring public safety at these times, but primary responsibility has to lie with the premises licence holders to ensure that they have adequate resources to deal with problems in and around their bar. The applicant, therefore, proposes that all Town Centre bars and clubs have a minimum number of door supervisors and that this number be increased, proportionately, between the hours of 02:00hrs and 05:00 hrs, if the bar remains open during any or all of that time.

The applicant will submit specific evidence in support of its application for a review of the licences in advance of the hearing. This evidence will include (not an exhaustive list):

New Conditions Sought:

The new conditions sought on all 22 licences are:

It shall be a condition of the licence that during any regulated drinks promotion under this condition, the following conditions shall apply to the operators licence.

It shall be a condition of the licence that any regulated drinks promotion is brought to the attention of the Licensing Authority and Greater Manchester Police at least 7 days in advance. In addition, for the duration of the regulated drinks promotion, the licence holder must commission Greater Manchester Police to provide two additional police officers for the purpose of patrolling the premises and its surrounding environs. A fee is payable for this to GMP at standard advertised rates.

For the purposes of these conditions a regulated drinks promotion is any promotion, marketing, sale or supply of alcohol between 21:00 hours and 05:00 hours that:

A unit of alcohol is defined as the amount in millilitres multiplied by the amount of alcohol by volume (ABV) divided by 1000.

Proposed Additional Condition for Door Supervision

It shall be a condition of this licence that, between 21:00 hours and 02:00 at least 2 number of SIA licensed door supervisors are employed at the premises in addition to any other licensed door supervisors required elsewhere in this licence.

It shall be a condition of this licence that, between 02:00 and 30 minutes after closing time (if applicable), or during any regulated drinks promotion (see above), at least 6 number of SIA licensed door supervisors are employed at the premises in addition to any other licensed door supervisors required elsewhere in this licence.

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