Setting the record straight on pricing

I am not sure that I entirely agree with the conclusions of the front page story last week on minimum pricing, and in particular that the Office of Fair Trading (OFT) has ruled that it is illegal in all circumstances.

The problem is that this is competition law, not licensing law. What the OFT did in their memorandum to LACORS (which advises local authorities on regulatory practices) was to dangle the carrot of a possible route to price control by means of the alcohol licence itself.

It repeated the position on cartels and agreements between licensees and confirmed that this was anti-competitive and in breach of the Competition Act. But it did allow that if the initiative came from the imposition of a legal requirement, it would not breach Chapter 1 of the Act.

This is what has been seized on by commentators. A legal requirement, says the OFT, is one "imposed by or under an enactment in force in the UK, such as licensing legislation". So, if a local authority, after hearing all the evidence and when other methods of control appeared to be ineffectual, decided that in a particular area the problems of disorder were in part caused by the practice of happy hours, it could invokethe condition-making powers ­ probably on representations made by the police ­ to ban them in a certain defined area.

The police could not do it directly, although they have powers of instant closure under the licensing laws already if there is disorder. This type of ban would have to be done on review of the licence after representations had been made. It is a tricky and cumbersome wayforward, and would result undoubtedly in appeals, but it is certainly possible. I do not think it is right to say that local authorities do not expressly have the power to do so ­ the OFT in fact said that they did, as I have quoted above.

There would continue to be a problem in wording the condition, but I am sure that LACORS could call on enough legal expertise to prove a form of words which would effectively put a stop to the practice. But it could not be open-ended: the council would have to review the effect of such a ban and would thereafter have to see if other methods of controlling disorder were better or equally effective.

One thing is certain ­ a blanket ban on happy hours, as suggested by some newspapers, is entirely out of the question.