Memorandum submitted by The Association of Licensed Multiple Retailers




1. The Association of Licensed Multiple Retailers (ALMR) welcomes the opportunity to submit written evidence as part of the above inquiry. As the only national trade body dedicated solely to representing the needs and concerns of pub and bar operators, and a member of successive Ministerial Working Groups looking at the development and implementation of the Act, the Association is well placed to comment on its effects.


2. By way of background, the ALMR was formed in 1992 specifically to represent the interests of those companies operating a small estate of pubs or bars, but without any interest in brewing. At the time, such companies were not eligible for membership of the then Brewers' Society. Lobbying for a change in the licensing regime to reflect the needs and concerns of this new type of entrepreneurial business was high on the new Association's list of priorities and, during the 1990s, we chaired the industry working group developing proposals for new personal licences; which directly fed into the 2000 White Paper, Time for Reform.


3. Today, just under 100 companies are in membership, representing 15,200 pubs and bars. Between them, ALMR members operate around half the UK managed estate; that is, those outlets directly operated by the company owning or leasing the property. Whilst we have a number of national companies within membership, over two-thirds of members are small independent companies operating 50 pubs or fewer under their own branding. As well as pubs and bars, our members operate restaurants, clubs and café bars. These are predominantly suburban community or neighbourhood outlets.


Licensing Act Overview

4. The Licensing Act 2003 was a significant and substantial piece of legislation which introduced a seismic shift in the way in which the industry was regulated - from a regime based around the separate licensing of different activities, to one based around the premises in which those activities were carried out. It consolidated six regimes for different types of outlet into one, harmonising the sale of alcohol with the provision of regulated entertainment and the sale of late night refreshment. At a stroke, the number of forms required for a diverse, multi-faceted business was reduced from 200 to 20, the plethora of licensing authorities businesses needed to deal with - and the fees they had to pay to them - was consolidated into one.


5. From a business perspective, it is this simplification of the regulatory regime which is the most significant and practical effect arising from the new Act; and one which must be protected and retained at all costs. The Licensing Act 2003 is a rigorous and robust piece of legislation which allows a licence and conditions to be tailored exactly to the needs of a specific business. We would strongly urge politicians to resist calls for special and additional licences to be applied to certain sectors of the entertainment industry, such as those operators providing adult entertainment. This would be a wholly retrograde step and would unravel the most beneficial commercial effect of the Licensing Act 2003. We fear that special treatment of one category of outlet would swiftly see the return of different categories of licence for other types of outlet.


6. A single premises licence for multiple licensable activities has also encouraged the development of hybrid style businesses - a move away from the traditional pub model based on consumption of alcohol alone and towards an adaptable social space providing morning coffee, quality food and entertainment within the same venue. There has been much scepticism about whether the Act has delivered a 'café society' and more diverse evening economy, but evidence from the ALMR's Annual Industry Benchmarking Report suggests that it is having an effect.


7. The UK pub, club and bar market has contracted over the past decade and a half. Since the introduction of the Licensing Act 2003, the number of outlets has declined by 3.5%. In the case of managed estate - ALMR members - the decline has been more pronounced. This overall trend masks some distinctive shifts in trading style, however.


UK Managed Pub/Bar Estate


Oct 2004

Oct 2006

Oct 2008

% Change


Community local





Food led outlet





Town centre bar





Accommodation led










Seated café/wine bar





Total Managed Estate





Source: CGA /ALMR Benchmarking Survey


8. As can be seen from the above table, it does appear that the Licensing Act has encouraged a shift towards a more café-style, seated operation in which food is as important as alcohol sales. Last year, the spend on casual eating out overtook spending on drinks for the first time. Change has been gradual and organic, with outlets broadening the scope of their offering. There has undoubtedly been a move away from the traditional public house model with the pub as an outlet for driving beer sales and now towards a more diverse commercial offering. The trend is undoubtedly market led, arising from demographic change, but it has nevertheless been accelerated in recent years as a result of regulatory change.


9. It was also anticipated that the introduction of the Licensing Act would result in a significant deregulation of outlet closing times. Change here has been evolutionary rather than revolutionary. Research conducted by CGA suggests that 1 in 5 pubs still closes at 11pm and over 80% of outlets are closed by midnight. Fewer than 1% of pubs, clubs and bars (450) have a 24 hour licence, and we are only aware of 2 of those currently using that permission.


10. In contrast, however, there has been a significant shift in trading conditions in the off-licence sector which is directly attributable to the Licensing Act. Under the previous licensing regime, hours during which alcohol could be retailed in the off-trade were strictly regulated. No outlet could sell alcohol after 11pm and product could only be retailed from a separate section of the store. These restrictions have been swept away. The presumption now is that alcohol can be sold at any time when the store is open and in any position. This has resulted in alcohol being actively promoted and price used as a key footfall driver. As a result, sales of alcohol through the pub channel have declined and the market share of the off-trade has increased significantly.


11. It is also worth noting in this context that the Act has directly contributed to an increase in professionalism and training in the sector. Since its introduction, over 250,000 individuals working in the sector have been issued with a personal licence.


Change in levels of nuisance, night-time offences or perceptions of public safety

12. When the Licensing Bill was being debated in Parliament, there was much concern that it would lead to a 24 hour, 7 day a week drinking climate, with a correspondingly adverse effect on crime, disorder and anti-social behaviour. Thankfully, the perceptions played out in the media at that time have not been reflected in the experience of our members and other operators. As has already been noted above, the change to licensing hours has been gradual and the impact on levels of nuisance, night-time offences and perceptions of public safety has been correspondingly limited.


13. In terms of perceptions, the effect of the Act has been undoubtedly positive. Half of all police licensing officers believe that the Act has had a positive impact on crime and disorder. There has been no statistically significant change in the proportion of people perceiving there to be high levels of anti-social behaviour over the past two years since the Act was introduced. Alcohol is also perceived to be less of a factor in overall levels of crime, disorder and public nuisance. In 2004, the British Crime Survey suggested that alcohol was perceived to be a factor in 48% of all crimes. That has now fallen to 44%, and the perceived risk of being a victim of crime is also at an all-time low of 24%.


14. Looking at actual night-time offences, police recorded crime statistics also show a significant drop in crime levels. Crime peaked in 1995 and has fallen by over 44% to 1981 levels since that date: 8.5 million fewer crimes. Indeed, there has been a 5% drop in violent night time crime and a 3% fall in less serious woundings since the introduction of the Licensing Act alone. It must be borne in mind that over half the offences included within the definition of violent crime involves no injury.


15. Official Home Office statistics show there have been 28,815 fewer offences since the Licensing Act was introduced. The decrease has been particularly pronounced in the early evening period to midnight.


Serious violent crime -1592

Less serious wounding -20620

Assault -2815

Harassment 3627

Criminal damage -6078


Net fall -28815


16. It is true that the same statistics do show a small increase in crime between 3-6am - up 22% - but this is from a very small base and represents just 10,000 additional offences over the course of the 2 year period. Crime during this time period is a very small proportion of overall crime, and the small increase is more than offset by the fall at all other times.


17. The ALMR Annual Industry Benchmarking Report suggests that the industry has made considerable levels of investment in security in and immediately around their premises which have contributed to the decline in crime and disorder (see table on page 5). This reveals an investment in door supervision and security of some 2.33 per cent of turnover (averaged across the sector as a whole). This ranges from just under 1% of turnover for food and accommodation led outlets, to almost 9% for late-night businesses.


18. This decline in levels of crime is under-scored by other social indicators to suggest that the Licensing Act has had no adverse effect on anti-social behaviour and public safety. Analysis of A&E admissions suggests that there have been 6,000 fewer alcohol-related admissions since the introduction of Licensing Act. Office for National Statistics data also shows a steady decline in alcohol consumption in all age groups and across both sexes over the past decade, and more particularly since 2004.


19. Average weekly consumption for men has fallen 13% since 2000 to 14.9 units and for women by 3% to 6.3 units (having risen to a high of 7.6 units in 2002). The decline is more pronounced amongst younger age groups, with consumption levels for young men down 37% and for young women down 29%. The UK is now 14th out of 20 EU countries in terms of per capita alcohol consumption.


20. Turning to look at nuisance, there is no evidence to suggest that the introduction of the Licensing Act has led to an increase in statutory or public nuisance. The most obvious source of this is noise nuisance, but evidence from the Chartered Institute of Environmental Health shows no change as a result of the Licensing Act and also suggests that noise nuisance from licensed premises is less of a problem than may be perceived.


21. The CIEH Annual Survey of Noise Enforcement for 2006/7 shows that noise from all leisure and commercial premises (not just entertainment venues) accounts for just 13% of all noise complaints and enforcement actions. In terms of incident numbers, there are 845 per million population for commercial uses as opposed to 4329 per million population for domestic premises. The Live Music Forum report suggested that noise from entertainment venues constituted just 7% of all complaints, with 6 times as many complaints arising from domestic music.


22. The DCMS Statistical Bulletin for the period April 2006-March 2007 suggests that the new Act is also having a positive effect in tackling any problems which may arise with particular premises. During that year, almost 700 licences were reviewed - the final and ultimate sanction after other powers of enforcement has been deployed. As a result, 92 were revoked and a further 91 suspended.


Impact on Live Music

23. The introduction of the Licensing Act has not led to the promised increase in live music. The removal of the old "2 in a bar" rule, which allowed small pubs and bars to host small scale live music events without the need for a separate licence was completely swept away. The increased costs and difficulties of applying for a variation to an existing licence had a significant deterrent effect for many operators, resulting in an immediate decline in live music venues at the point of transition.


24. Those who did continue to include live music in their list of licensable activities have found that the controls applied to the business are often disproportionately costly. As a result, they seldom make use of their permission. In our experience, many local authorities automatically assume that live music will automatically result in a noise nuisance and place extensive and costly pre-emptive conditions on a licence.


25. The ALMR's Annual Industry Benchmarking Report highlights the effect this has on operational practice. The report looks at common controllable site costs and asks operators to express these as a percentage of turnover. This reveals the true cost to the business. The results for entertainment are set out in the chart below, and show a 19% decline in music and live entertainment costs as a percentage of turnover across most sectors; in the case of community operators they have halved. With live entertainment costs going up in the club sector and remaining static for town centre outlets, the only logical explanation is that music and live entertainment is being sacrificed in order to keep a lid on costs.



26. We believe that there are some simple steps which could be taken to reverse this decline in live music within small venues. The existing exemption is only partial - disapplying conditions related to public nuisance at certain times of the day when live music is being played and then only for venues with a very restricted capacity - and its use is limited by being too complicated for most operators to understand and too complex to have practical application. We would therefore support the Live Music Forum's recommendation that live unamplified music be exempted from the list of licensable activities. We also recommend that a form of the "2 in a bar" rule be re-introduced to allow venues to offer live music performed by fewer than 2 musicians before 11pm without the need for specific permission on their licence. The review process provides a mechanism for complaint and redress should the practical implementation of this cause problems to neighbouring residents.


Has the Act led or is likely to lead to a reduction in bureaucracy and have the anticipated financial savings been realised?

27. The ALMR has chosen to respond to these two questions together, because the answer to the latter is largely dependent on the former. The original Regulatory Impact Assessment to the Act estimated that the introduction of a new single licensing authority and the merging of six regimes into one would result in savings of some £1.9billion over 10 years, or £190million annually. DCMS itself estimates that the new regime has saved only £99 million pa in red tape.


28. The anticipated savings to the industry have yet to be fully realised. This is in part due to the fact that the annual recurring costs to the industry are considerably higher than predicted. During the passage of the Act, the annual fees were estimated as being between £50-150 per outlet. In reality, they are between £70-350. We estimate that the transition to the new Licensing Act resulted in a one-off cost of £99million to the industry, with ongoing costs of £40 million.


29. The second reason is that measures to remove additional unnecessary bureaucracy and costs for the industry appear to have stalled. The Government has recently announced that it will be introducing a new minor variation process, which should result in further cost savings, but this is an isolated move to further realise the cost savings anticipated in the Regulatory Impact Assessment.


30. In 2005, the Independent Fees Review panel recommended a series of measures to be taken to further simplify the licensing regime. This included a move to a common payment date for all annual fees, simplified advertising requirements and the introduction of electronic application. No progress has been made towards addressing these measures, despite them being included in the DCMS Better Regulation Simplification Plan 2006. All three of these measures would reduce bureaucracy and costs to businesses.


31. The average cost of applying for a straightforward licence is some £2000, but it ranges from £1000 to £4000. The requirement to produce 7 certified hard-copies of the application is a significant element of this. Making it mandatory for licensing authorities to accept electronic forms would allow for reduced costs. Equally, simplifying advertising requirements, and particularly abolishing the requirement to advertise in a local newspaper, would reduce costs for the business by some £400-600. The copying and advertising requirements are particularly onerous if small errors or omissions are made in the application requiring it to be resubmitted.


32. The move to a set day on which all annual fees would be payable would equally reduce administrative burdens, particularly on multiple businesses. At present, the fee is due on the anniversary of grant of the licence, and the onus is entirely on the business to remember to pay the fee on time; no reminders are sent out and often no invoices either. It is therefore incumbent on the business to log the date on which the fee is due and put in place a mechanism for ensuring it is paid. It is worth noting in this context that the Scottish Executive, in its proposals for a new licensing regime, have moved to a single payment date and also require licensing boards to send out reminders.


33. We estimate that these three measures would save the trade an estimated additional £20-25 million per annum.



34. The Licensing Act 2003 represented a significant change in the way in which the sale of alcohol, provision of entertainment and late night refreshment were regulated. Such a complex and detailed piece of legislation takes time to bed down, and many of its effects can only fully be assessed now.


35. The single most beneficial change for operators was the reduction in red tape and bureaucracy resulting from the simplification of the old regime, based around the separate licensing of different types of activity, to a single premises licence allowing a range of different activities to be provided. This also allowed the licence to be exactly tailored to the needs of the business and the risks it posed to public order, safety and nuisance. As a result, despite extensive deregulation, the introduction of the Act has not had a harmful effect on any of these. There may now only be one type of licence, but in reality there are over 57,000 different and individual licences in the on-trade alone.


36. The second most significant effect has been the positive response of the industry to that liberalisation. There is now real evidence of a move towards a more diverse and broadly based offering, with a significant shift towards seated café-style operations - the only sector to buck the trend of a contracting market. The industry has also invested heavily in security and staff training on the back of the Act.


37. Despite this, however, the Licensing Act has failed to deliver in full its promise of financial savings and reduced bureaucracy. Less than half the anticipated savings set out in the initial Regulatory Impact Assessment have been realised. This is in part due to the slow progress of further reform. Problems with the Act were identified by the industry and other stakeholders in early 2005 following our experiences during transition. Changes were recommended by the Independent Fees Review panel in 2005 and again in 2006. Despite issuing a departmental simplification plan in 2006 committing to further deregulation, the Government has yet to formally respond to - let alone take forward - the panel's recommendations.


38. If the full positive benefits of the Act are to be delivered, we recommend the Government take the following actions:


- exempt unamplified live music from the scope of the definition of regulated entertainment

- re-introduce the "2 in a bar" rule to allow smaller premises to continue to provide live music before 11pm free from the fear of unnecessary interference from the licensing authority

- move immediately to an common payment date for annual fees

- make it mandatory for licensing and other regulatory authorities to accept electronic applications and fees

- abolish the requirement to advertise applications in local papers.



September 2008