I recently read a newspaper report claiming ministers now believe the drinks trade ‘cannot be trusted’ to observe its own voluntary code promoting responsible drinking. So, we are informed, the DoH and the Home Office will shortly consult the public (i.e. the main lobby groups) on new measures to curb the ‘irresponsible’ sale of alcohol. It appears a ban on happy hours is already on the cards.
That this particular form of competition should be targeted comes as no surprise to those of us who have long been sceptical of the pub trade’s claim to have extinguished it voluntarily. It would be quite wrong, however, to accuse the drinks industry of duplicity when it signed up to a voluntary code – even if it was yet another triumph of hope over experience.
Voluntary restraints on competition, even if legal, are virtually impossible to apply in a market that is highly fragmented and rapidly shrinking. Thirty years ago, when the on-trade was dominated by a few big brewers, restrictions on competition were enforceable. But in the late eighties pub ownership was fragmented in the cause of more competition – and we are now living with the results.
Media coverage of binge drinking never touches these structural issues. Nor has much attention been paid to the fundamental problem of reconciling the various restrictions peddled by the anti-alcohol lobby with the realities of competition law. We regularly hear calls for the imposition of minimum pricing and for banning ‘irresponsible’ promotions. Perhaps regulation advocate Professor Gilmore, chair of the Alcohol Health Alliance, would like to offer us a clear and legally watertight definition of an irresponsible promotion. Would it, say, include £1 off a bottle of medium-bodied French red wine normally retailing at £6.99? As for minimum pricing, both the EU and the OFT would almost certainly strike it down as anti-competitive. Attempts by the drinks industry or any group of retailers to restrain promotions voluntarily would meet the same fate. The only practical way of raising prices is through the excise duty. But an increase big enough to seriously reduce consumption, already trending down, will hit those who drink sensibly at least as much as those who don’t – and sooner or later the returns to the Treasury will diminish.
So a ban on happy hours appeals to ministers who want to be seen to be doing something about alcohol. Whether it will make any difference is another matter.
Kevin Hawkins is an independent retail consultant