Mixed signals

Related tags Minimum pricing Local government

Some conflicting messages on minimum pricing are emerging from the OFT and the Home Office. Tom Sandham reports.At its height, the cheap drink...

Some conflicting messages on minimum pricing are emerging from the OFT and the Home Office. Tom Sandham reports.

At its height, the cheap drink phenomenon delivered some pretty ridiculous promotions. One was even rumoured to include drinking for free until you needed the toilet. There must've been a few in the bar crossing their legs that night.

Promotions like this one emphasised how irresponsible some venues had started to get, but fortunately over the last 12 months this has eased. The trade has looked at the government's concerns and begun to tackle the problems - in a lot of cases with significant vigour.

For some, the answer was a minimum pricing scheme. Here local pubs and bars got together, usually working with the police and their local authority, to agree basement prices for drinks. For some it seemed to work but in recent weeks this particular method of tackling the binge-drinking problem has come under fire.

More serious than a simple distaste for the schemes, as harboured by JD Wetherspoon among others, the criticism has now been based on the legality of them.

In what has proved to be quite a confusing statement, the Office of Fair Trading (OFT) has reiterated its claims that minimum pricing schemes actually contravene aspects of the Competition Act 1998, making them illegal.

No legal right

OFT spokeswoman Kate Wilcox says: "If minimum pricing is imposed as a condition of holding a licence and states that pubs have the same price, we wouldn't consider that a breach of competition law.

"But police and local authorities have no legal right to impose such a policy and if licensees come forward and suggest it they will also be in breach. We have always understood this to be the case and investigate any complaints on this issue."

Minimum pricing schemes have been in operation in towns and cities across the country since the mid-1990s. Starting off in Sunderland, followed by Nottingham, Middlesbrough and Bournemouth have followed suit and more are considering them.

Last week Taunton became the latest advocate, imposing a minimum price as part of a wider reaching code of practice - and Taunton Deane Borough Council appears to have done so with the blessing of the OFT.

Although there are certain requirements to be met by the council - featured in a three page letter from the OFT - it looks likely the scheme will get the green light with support from police and licensees.

In fact, if confirmed legal, Wetherspoon is also expected to join - dropping its controversial Pricewatch which compares the prices of local competitors' drinks to its own very cheap ones.

"We have researched this and had legal advice," explains Jim Hunter, who works in licensing for the council. "My understanding is that if it's entirely voluntary we're OK. It's true that the views expressed by the OFT have been vague, but if I've done everything it has asked I'm confident we can go ahead."

Seeking clarification

Mr Hunter has been told that the Home Office will clarify the stance in the next few weeks - something he is looking forward to.

A Home Office spokesman confirmed this: "The government is engaged in ongoing discussions with key industry figures. Through the Alcohol Harm Reduction Strategy [published March 2004] bars and clubs are strongly encouraged to sign up to a code of practice for retailers which might include a pledge to abide by the existing British Beer & Pub Association's code on irresponsible promotions, with a commitment not to sell drinks at unsustainably low prices or to encourage high levels of irresponsible consumption - for example, 'all you can drink for £10'".

The government has made it clear that if there hasn't been an obvious improvement in alcohol-related violence in the next 12 to 18 months further steps will be taken which could include legislation in the next parliament.

So where does everyone stand right now? Unfortunately, the answer to that is not straightforward. Jon Collins, chief executive at the British Entertainment and Dance Association (BEDA) and a man with minimum pricing on his mind, thinks he knows why.

"As I understand it the OFT was set up to be a reactive organisation," explains Jon. "It is there to make an investigation into this if asked, but it is deeply reluctant to broaden the explanation. We have used case law in Brussels to make the point that if it's in the public's interest then it is legal. But like everyone we are waiting for the government to give clear guidelines."

So for the moment we wait. Tony Payne, chief executive of the Federation of Licensed Victuallers' Associations, sums it up nicely: "If I were a licensee I would probably avoid getting involved. If you say you're not part of it but decide to review your prices to fit in with what is proposed, then you can avoid any legal difficulty and still go along with the measure."

Minimum prices in Taunton