Examination of Witnesses (Questions 400
- 419)
TUESDAY 3 JUNE 2008
MR ROB
CHESTER, MR
JAMES LOWMAN,
MR ROB
HAYWARD OBE AND
MR ALAN
BROWN
Q400 Mr Winnick: As a result of the
change in the licensing laws the general feeling, evidence based
or otherwise, is that the drinking of alcohol has increased substantially.
Is that your view, gentlemen?
Mr Hayward: Referring back to
the figures I quoted just now, the answer is no. The Licensing
Act has provided a backdrop against which there is social concern
about alcohol consumption. There have been some marked changes
as a result of the Licensing Act, not least of which, certainly
if you talk to the police authorities as I know you have, is that
in many cases there has been a movement away from consumption
in high streets and city centres into the outer areas, because
if you can drink for an extra half-hour or so in a pub or bar
why pay for a cab to go into a town, the entry fee and all the
rest of it? There are a number of cities where the whole lifestyle
has changed which throws up different problems in terms of the
policing of bigger areas.
Q401 Mr Winnick: You are saying that
it has made no difference. The amount of drinking has that occurred
since the Act came into operation shows no increase and we should
not be at all worried?
Mr Hayward: I did not say that
at all. I said that it was the backdrop against which there was
a whole series of issues related to alcohol. I was identifying
one of the most identifiable patterns where local authorities,
police and the industry all agree there has been a change. That
is something which changes the circumstances. In relation to overall
alcohol consumption as we sit here one Member of this Committee
will see the brewery in his constituency close in 2010 and another
Member has seen substantial redundancies in the brewing industry.
I think the best indication in relation to alcohol consumption
is the experience of Members of this Committee.
Q402 Chairman: Mr Lowman, do you
want to comment on Mr Winnick's question?
Mr Lowman: I refer back to my
previous answer. My colleague has referred to the statistics for
the overall levels of alcohol consumption which are probably inconclusive.
One year it has gone down and another year it has gone up. My
main point is that I do not believe those changes are linked directly
to the Licensing Act 2003.
Q403 Mr Winnick: So, if the Licensing
Act changed—I do not suggest it would be—you would
be quite neutral; you would not have any particular views one
way or the other?
Mr Lowman: It depends on how it
changed and what was required.
Q404 Mr Winnick: Let us say it made
the position more restrictive.
Mr Lowman: We would have concerns
about any piece of legislation that imposed new bureaucratic burdens
on members and restricted their ability to trade.
Q405 Mr Winnick: I thought you would.
Do you say the same, Mr Hayward?
Mr Hayward: Yes. When the Act
was introduced it was the view of government and the police that
what one did not want was everybody racing to consume until 11
o'clock with vast quantities being thrown at people who would
come out to a city centre all fighting at the minicab ranks and
in the local kebab shops. If you disperse that more effectively
over a period of time there is hope that you may achieve some
changes in terms of social behaviour. Some of those changes have
not as yet come through and I would like them to do so.
Q406 Mr Winnick: Have we not seen
examples up and down the country of people clearly intoxicated
at all hours of the day, including well beyond 11 o'clock? It
is very difficult to take what appears to be, if I may say so—if
you take offence, so be it—a complacent attitude that the
Act has made no difference at all. We see it with our own eyes.
Mr Hayward: I echo what ACPO has
said in relation to alcohol. What I said was that there was an
overall social issue which must be tackled in whatever field we
are engaged, whether it is politics, industry, the police or local
government.
Q407 Mr Winnick: A social issue that
is made worse by making it easier to get drink?
Mr Hayward: I would refer back
to the analysis made by the Home Office and DCMS. It is your own
government's analysis, not ours.
Q408 Tom Brake: I put a question
to all of you. Clearly, there will be rogue supermarkets, pubs
and corner shops. Do you believe that the action being taken is
tough enough? Is it not in your interests for much firmer action
to be taken to close down the rogues because they are tarring
your industries with the same brush?
Mr Chester: I think I made the
point that the Licensing Act 2003 contains some very draconian
measures. Clearly, government measures the performance of industry
all the time in terms of test-purchasing, that is, sending people
into stores to try to buy alcohol and that sort of thing. We do
a good job and we have been improving. That leaves no room for
complacency because we can always get better, but none of our
colleagues or any of our store managers sells alcohol irresponsibly
or to underage people through the day. That is just not what we
are about. Managers and colleagues live in that community as well.
Mr Lowman: No one wants to get
rid of rogue retailers in the market more than our members; they
do not want to compete against people who flout the law. I believe
the numbers who flout the law are very small. The Licensing Act
2003 provides very strong powers to tackle those and the way it
is enforced day to day is that there is targeted test-purchasing
activity. I think that where the Act works best is when it operates
in partnership with local authorities, the police, schools and
parents to try to tackle all parts of the problem. It presses
all the buttons rather than just one. That is how you identify
rogue retailers, and we fully support the loss of their licences.
The Act includes ample powers for licences to be revoked.
Mr Brown: I should like to align
myself with the comments from Asda, which is an unusual situation
for my company. We would like to see rogue traders made subject
to the penalties under the Act. As an organisation we are very
clear about the standards set by the Licensing Act and we are
determined to trade within them, and we do an awful lot to ensure
that that is the case. Unfortunately, there are very rare occasions
when people do not meet those standards, but there are many other
times when colleagues refuse sales to people who try to buy alcohol
underage. I think that the challenge is to ensure that that motivation
is still there but to find a way to bring ourselves closer to
the Police Service, trading standards and the local authorities
to make sure we are all aware of what we are trying to achieve
and how we are doing it. There are a number of very good practices
in place in different parts of the country to reinforce that approach.
Q409 Mr Winnick: There was a report
on what is described as "pre-loading" which made the
point that individuals consumed large amounts of alcohol at home
prior to going out. The report was critical of the fact that the
measures to tackle drunkenness and related violence tended to
focus on bars and public places but not off-trade premises. Some
of you probably take the view that that is appropriate criticism.
Mr Chester: There are headlines
in today's newspapers about challenges to consumers' pockets.
I certainly believe that drinking patterns have changed. Fifteen
or 20 years ago you went to the pub from seven o'clock in the
evening, but I think that drinking patterns have changed since
then.
Q410 Chairman: How much do 12 cans
of Stella Artois cost at Asda?
Mr Chester: I cannot give you
a precise figure today; I can do so afterwards, but I would guess
the cost would be about £10.
Mr Winnick: Is it right that as a result
of competition if Asda is selling it at a certain price and Tesco
wants to remain in business and sell that sort of stuff it will
simply vary or lower the price?
Q411 Chairman: Before we compare
prices, can Mr Lowman answer the question about pre-loading put
by Mr Winnick?
Mr Lowman: I think the evidence
submitted by the BBPA suggested that a small proportion of people
drank before they went out in the evening. I think that has always
happened to a degree. Issues around price and so on are part of
that. The vast majority of customers to whom we sell alcohol drink
it in front of the television. My colleague Rob Hayward is in
a very exciting industry; we are in quite a boring one in that
in our case the people who buy alcohol consume it while they sit
in front of the television to watch East Enders. That is
the core of our business. Of course, some people will choose to
drink before they go out, and they always have done.
Q412 Chairman: And the beer that
you sell is not cheaper than £10 for 12?
Mr Lowman: We are a trade association
and so it will vary enormously across the industry.
Mr Hayward: There are certain
excitements to which Mr Lowman refers that I could well do without,
but in terms of the actual pricing clearly there is a huge differential
between our association and other markets.
Q413 Chairman: What about pre-loading?
Mr Hayward: Pre-loading is something
that has impacted enormously on the pub industry. I gave evidence
to the Select Committee on tourism and was asked a lot of questions
about pre-loading at the time. It is now reckoned that about 80%
to 90% of all youngsters, ie people aged 18 to 30, pre-load before
they go out in the evening. Not only is there some evidence that
it is a rapidly growing proportion of the population but the amount
they consume is also increasing.
Q414 Chairman: Do you know from where
they get that alcohol?
Mr Hayward: Clearly, it will be
off trade.
Mr Brown: It is difficult to make
a comment about people's habits in their own homes. Our business
is about trade and retail. In answer to the question about competition,
yes, it is an incredibly competitive market and businesses do
respond to market pressures and moves by others in that same trading
area, but in terms of our research into those to whom we sell
alcohol the majority of it is sold to young families and slightly
older families.
Q415 Chairman: Young families?
Mr Brown: I am referring to families
with children under the age of 10. It is difficult to see how
those form the group about which perhaps Mr Winnick is concerned
in terms of pre-loading. We find that when people buy because
of a particular promotion they stock up as opposed to drink more,
so they take the opportunity to make use of that value offer.
As a consequence we notice that the sale of alcohol to those individuals
drops off for a period.
Q416 Mr Winnick: Do you feel any
sort of responsibility when it comes to pricing? One store sells
at a particular price. A rival store, be it Tesco, Asda or whatever,
wants to maintain business and therefore lowers the price. Inevitably,
by the very nature of the retail trade alcoholic drink becomes
cheaper and all the difficulties that we are discussing become
more acute. Do you feel any sense of responsibility when it comes
to pricing as to what could follow from that?
Mr Brown: We are very happy to
engage with the government. Government needs to take the lead
because of the Competition Commission and the laws that surround
competition. We are very happy to engage in a discussion about
pricing, but it must be led by government.
Q417 Mr Winnick: Presumably, you
have not done so thus far?
Mr Brown: We have not done so
thus far. Sir Terence Leahy has mentioned it to the Prime Minister.
We are very happy to engage in that process, but it must be government
led because of the restrictions relating to competition.
Mr Chester: I have to echo those
comments simply because as my colleague from Tesco says that is
a competition matter.
Q418 Chairman: So, if the government
says that the price should be increased you are happy to do that?
Mr Chester: Obviously, the vast
majority of customers who purchase and drink alcohol do so in
a perfectly responsible manner and I think that has to be borne
in mind. Overall price increases may not tackle the issue that
you are discussing.
Q419 Martin Salter: It is probably
worth declaring my interest. I am the Member of Parliament whose
constituency will lose 500 jobs as a result of declining beer
sales particularly in the on trade market as a result of the closure
of Courage brewery. I suppose that initially my question should
be addressed to Mr Hayward. The figures before the Committee based
on NHS statistics on alcohol published this year show that in
2007 alcohol was 69% more affordable in the United Kingdom than
it was in 1980. I also hear stories—I have not seen it myself—where
in some supermarkets as a result of using loss leader promotions
one can buy cans of strong lager cheaper than bottled water. Clearly,
that is bonkers and it has social and police ramifications. I
know that the other witnesses will disagree with this, but is
there not a case for changing the burden of taxation on alcohol
so that more of it falls on off trade where a lot of the problems
arise rather than on trade where the evidence shows that people
drink in a managed environment?
Mr Hayward: Thank you for that
supportive comment in relation to pubs. Clearly, it is a decision
for government in terms of all the information it has as to where
the tax burdens fall. I am not sure one can discriminate legitimately
between product sold on one side or the other. We would love it
to be because of the crisis we face in relation to pubs closing
at the current rate of four a day. I think every constituency
MP will recognise that large numbers of pubs are being lost. In
relation to pricing I touch on just one matter. In answer to Mr
Winnick's question we operate a promotions policy. We have had
such a policy for a number of years. We encourage our members
to operate very effectively, so we have moved away very considerably
from all you can drink all night for £5 or £10 and letting
women in free, which encourages excess consumption, and speed
competition so you get beer at a certain price before England
score a goal or whatever it happens to be.
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