The cost of selling booze from a chain of 50 stores could rocket from £1,500 to between £8,000 and £47,500 over three years under government plans to revamp the alcohol licensing system in England and Wales.
Under the proposed fee structure for the new Licensing Act, retailers that previously paid £30 for a three-year drinks licence will have to pay between £160 and £950. This will comprise a one-off fee of £80-£500 in year one depending on the rateable value of the business and an annual fee of £40-£225 thereafter.
Under the new system, the cost of licensing Aimes’s three convenience stores in Clacton for three years will go up from £90 to £1,200.
Director Deepak Patel said: “It’s just ridiculous and it comes straight off your bottom line.”
Multiply the new fees by the 46,600 premises in England and Wales that hold off-licences and the total bill for retailers could be between £7.5m and £44.3m.
The new system might be simpler and cheaper for pubs and clubs, which no longer have to apply for separate licences for entertainment, extended opening hours and other activities, but represented a massive cost increase for the average retailer, said Association of Convenience Stores CEO David Rae. “When the government describes the cost-saving benefits, they refer to nightclubs and theatres that undertake more than one licensing function.”
The 51 licensed stores in the Mills Group would pay roughly £8,880 under the new proposals, compared to £1,530 under the old scheme - an “astronomical” increase, said sales and marketing director, Dave Pickford. “We’re very much in competition with the major multiples who will be able to absorb the cost better. It’s unlikely they will increase prices and that reduces our flexibility.”
Booths chairman Edwin Booth said: “It may be fine for large supermarkets as they will be able to absorb costs, but for smaller operators, any increase will have major implications.”
A spokeswoman for Somerfield said: “This will be a substantial cost.”
However, a spokeswoman from the Department for Culture, Media and Sport said the current fee was far too low and even without a change in the system, rates would have gone up significantly this year.
She added: “The taxpayer has been subsidising the licensed trade for far too long. The new system is also much fairer because the same rules will apply across the country.”
Interested parties have until December 21 to comment on the proposed fee structure.