Licensees could be fined for defying Office of Fair Trading
Licensees could be fined tens of thousands of pounds if they sign up to controversial minimum pricing schemes.
The controversial schemes introduced by some local authorities to curb binge drinking set minimum prices for drinks promotions. But the Office of Fair Trading (OFT) warned this week that is licensees, not local authorities, who would face prosecution for signing up to the initiatives - which have been ruled anti-competitive.
It said licensees were liable to a pay a fine of up to 10 per cent of their total turnover, with licensees at managed houses facing a fine of up to 10 per cent of the whole company's turnover, which could easily run into thousands.
The news comes as Perth and Kinross licensing board decided to ignore the law and continue to defy the OFT by extending its scheme to more pubs.
The Scottish licensing board has told pubs in the town that if they do not agree to curb discounts and price promotions they will not be considered for licence extensions. And licensees are now faced with a choice between losing their late licences or facing prosecution by the OFT.
The Perth scheme is similar to one launched and then quickly withdrawn earlier this year in Middlesbrough. The U-turn came after a warning from the OFT that such initiatives are anti-competitive - it claimed that by keeping prices higher there was no longer a free market and said it could consider legal action if the scheme continued.
The British Beer and Pub Association is strongly opposed to such schemes, claiming it is illegal for external bodies to set pricing within the trade.
It has called instead for best practice, and issued guidelines that recommend happy hours are run over a longer period and advise publicans to avoid promotions such as buy-one-get-one-free. Paul Waterson, from the Scottish Licensed Trade Association (SLTA), said news of the OFT's powers to take licensees on the scheme to court had left many in a quandary. He added: "They don't know who to listen to.
"They're listening to the licensing boards at the minute because they are scared that they will take their extensions away."
