Examination of Witnesses (Questions 440
- 459)
TUESDAY 3 JUNE 2008
MR ROB
CHESTER, MR
JAMES LOWMAN,
MR ROB
HAYWARD OBE AND
MR ALAN
BROWN
Q440 Patrick Mercer: I find it very
hard to square the proposition that selling alcohol as a loss
leader is responsible.
Mr Chester: We treat alcohol very
differently from any other product. We give our colleagues more
training on making sure we never sell to underage people than
we do to any other product.
Chairman: But the question is about responsibility
in selling alcohol as a loss leader.
Q441 Patrick Mercer: I find the word
"responsibility" a contradiction in terms when one is
selling a dangerous drug which from my own past professional experience,
and now my parliamentary duties, causes much death and injury
particularly to the underage. I do not find that the words "loss
leader" and "responsible" sit comfortably together.
Mr Chester: I can understand why
you think that, but I reiterate that the vast majority of our
customers who buy alcohol consume it perfectly responsibly. The
question is whether you introduce—--
Q442 Chairman: Mr Mercer is not talking
about whether or not your customers are responsible; he is talking
about the responsibility of your company's policy. You do not
answer for your customers; answer his question.
Mr Chester: Asda always tries
to sell products at the keenest possible price because the vast
majority of our customers buy and drink alcohol responsibly. Of
course those customers expect us to sell alcohol that is affordable.
Q443 Patrick Mercer: May I suggest
that you substitute the word "irresponsible" or "immoral"
for "responsible"?
Mr Chester: I can only disagree.
Q444 Chairman: Mr Brown, do you have
any comment to make not about your customers' responsible drinking
but your company's behaviour in selling alcohol as a loss leader
bearing in mind the fact that 46% of offences are alcohol-related?
Mr Brown: I think there is a question
of definition of "loss leader". We sell alcohol which
enables us to continue our market share and compete in an extraordinarily
competitive market, so we will respond to the actions of other
retailers. In doing so we intend to make sure that our customers
have a wider choice of quality and value.
Q445 Mrs Dean: Mr Hayward, what effect
does the selling of alcohol as a loss leader have not only on
the on trade but on brewers?
Mr Hayward: At the moment the
profitability of brewers is lower than it has ever been before
which is why you have the number of closures and redundancies
that you face in your own constituency—Mr Salter has already
referred to this—and in a number of other constituencies
as well. Brewers are finding it incredibly difficult to maintain
their operations and some are going out of business as a result
of current circumstances. We put the information to the Treasury,
as did you, Mrs Dean, that profitability is at an all-time low
and the industry will not be able to continue. That will be a
serious threat to many communities around the country.
Mr Chester: I would just make
the point about brewers: they are the people who brew the beer
that goes into the cans.
Q446 Mrs Dean: How much pressure
does the retail industry put on the brewers to keep their prices
low when they sell to you?
Mr Chester: I do not deal directly
with the brewers. I can only imagine that with big corporations
like Asda and the brewers there will be robust negotiations over
price.
Mr Lowman: Our members will negotiate
as keenly as they can. The reality is that three-quarters of the
market is represented by the country's major grocers. We represent
part of the remaining quarter, so basic economics suggest that
we do not have the same power in that negotiation as some larger
retailers.
Mr Hayward: Our industry has made
absolutely clear that it does not like loss leading and it has
made representations to all sorts of authorities to that effect.
The capacity of our industry and others to pass through duty increases
and the like is very low and the net result is lack of investment
in the industry.
Mr Brown: In relation to your
question about how we negotiate with the brewers, obviously those
negotiations are based upon trying to achieve value which will
eventually be passed on to the customers, but it is also very
clear that we try to work with suppliers to make sure that they
have a sustainable position and we have a position where we are
able to sell their product in a value way to our customers. We
certainly do not want to disenfranchise or damage the level of
choice in supply that is available to us, and we purchase accordingly.
Q447 Mrs Dean: I put a question to
all of the witnesses. How much responsibility does and should
the industry take for alcohol-related crime and antisocial behaviour?
Mr Chester: We should sell alcohol
responsibly given all the measures that I and others on the panel
have outlined. I agree absolutely that we have a part to play.
Mr Lowman: We have a part to play.
We have to be very clear about cause and effect and the action
we are taking in terms of the way we retail alcohol and the effect
it has in terms of alcohol-related disorder and so forth. The
prevention of alcohol-related disorders is one of the four principles
of the Licensing Act. That Act therefore allows action to be taken
against businesses that are not doing what they can to meet that
objective.
Mr Hayward: We take it very seriously.
We have just introduced a document concerned with managing safety
in bars, clubs and pubs which has been discussed with and based
upon our negotiations with ACPO in terms of how venues should
be managed so that people can drink responsibly.
Mr Brown: We are very clear that
we shall trade only in a responsible fashion within the law. We
provide extensive training for our staff and we look to work with
the authorities where there are difficult areas in a way to promote
public safety and remove any difficulties within those areas.
Q448 Ms Buck: The chief constable
of Nottingham said: "What [the drinks industry] has done
is sacrifice responsibility for bigger profits . . .It has already
proved itself unworthy of self-regulation." Why would one
of Britain's senior policemen say that?
Mr Chester: Clearly, I cannot
comment on what he said.
Q449 Chairman: Why can you not comment
on what he said?
Mr Chester: I cannot question
what he said. If that is his view that is his view. We certainly
want to play our part in selling alcohol responsibly. For example,
one of the measures we have taken recently is not to sell between
12 and six in all of our town centre stores. We accept this as
a very different issue and that we have a part to play.
Q450 Chairman: Mr Lowman, do you
agree with him?
Mr Lowman: I am not in Nottingham.
Q451 Chairman: You do not have to
be in Nottingham.
Mr Lowman: He is commenting on
what he has seen on the streets of Nottingham and comes to the
conclusion that that is down to the acts of the alcohol industry.
I believe that the cause and effect between all different parts
of the industry, whether it be producers, pubs or shops—it
is not one homogenous mass—is not the strong, bold line
he suggests; it is much more a dotted line. In that area and all
others up and down the country local authorities and the police
are able to use powers to tackle premises and parts of the industry
that are not doing all they can to meet the four licensing principles.
Q452 Ms Buck: It is not working and
that is why he makes the remark?
Mr Lowman: Obviously, he feels
that it is not working in that particular area, but the powers
are there to be used.
Q453 Ms Buck: So, it is the fault
of the police?
Mr Lowman: I did not say that
at all. There are a number of complex issues to do with the causes
of alcohol-related disorder. There are cultural issues to do with
parenting and policing and sometimes it is very tempting to think
that there is one lever we can pull or one place we can look at
to solve the problem; it will not. The solution is more complex
than that.
Q454 Ms Buck: I am just asking you:
what exactly is your responsibility in this? One of Britain's
most senior policemen has said you have lost the right to self-regulate.
Mr Lowman: We are not self-regulated;
we are regulated by the Licensing Act 2003, so our responsibility
is to comply with that Act and go further in terms of pushing
responsibility particularly in relation to the issue of underage
sales.
Mr Hayward: We are not self-regulated.
With the police force in Nottingham we are developing a Business
Improvement District because we recognise that area has faced
particular problems. We are working with the police and local
authorities and hope that the BID will be fully operational before
long.
Mr Brown: I agree with my colleagues
that we are not a self-regulated industry. There is a significant
level of regulation that is available to the police, trading standards
and local authorities. We are very clear that we wish to work
with police and those agencies, so I have to divorce myself from
the chief constable's comments because there is probably a degree
of detail behind them that is perhaps not necessarily reflected
in that statement.
Q455 Chairman: You are a former police
officer yourself, are you not?
Mr Brown: I am.
Q456 Chairman: Do you agree with
Mr Lowman that the powers are there but they are not being used?
Mr Brown: I believe that the powers
are there. There are certain restrictions within the Police Service
in terms of resource availability and the challenges it faces
which make it even more important that as part of a regulated
industry we are prepared to work with former colleagues. We have
a big say in terms of wanting it to be a safe environment where
people feel comfortable to come and shop with us. It is important
that we work with the police, the trading standards and local
authority to achieve that environment. For me that is the key.
Mr Chester: I reiterate that certainly
in Nottingham for every one of our shops we have to agree with
the police the conditions to be imposed on them, that is, the
opening hours and so on. It is far more than self-regulation.
For all of those stores the police have every opportunity to come
forward with proposals about what more we can do about underage
selling or how we retail alcohol.
Q457 Patrick Mercer: Gentlemen, in
what way do you and your members work with the police to tackle
underage drinking and alcohol-related crime and disorder?
Mr Chester: We take pride in the
fact that every one of our store managers and colleagues in stores
has good links with the local police. They meet regularly and
understand the conditions that apply to the store. That has been
a very positive move from the 2003 Act and it is something that
must continue.
Mr Lowman: What we are trying
to do is spread best practice in the best way and engage in partnership
working. "Partnership working" is very easy to say but
it is very difficult to do because it involves so many people
and takes time and effort. I think the best example is the St
Neots project that off traders have piloted which involves all
the local agencies getting together and has had an effect in reducing
street drinking, using powers to confiscate alcohol, work with
parents and so on. That is the benchmark and we are trying to
push that best practice around the country. There are also some
fantastic examples round the country. Some members even have small
police stations in their stores. The absolute priority for us
as an industry association is to push that best practice wider
and wider.
Mr Hayward: To pick up what others
have said, not repeat it, as an association we actively encourage
and try to ensure that every Crime and Disorder Reduction Partnership
has a representative from the on trade participating in it. There
are ongoing discussions in that regard. We fund Pubwatch, for
example. That probably would not exist as a national organisation
but for funding by the British Beer and Pub Association. We try
to do those sorts of things all of which involve working with
the police.
Mr Brown: Within Tesco we have
a policy that demands that our store managers engage with police
at a local level. That takes a number of different forms. We have
local police stations in some of our stores. We believe that the
government's move towards neighbourhood policing is a significant
opportunity for communities. We want to make sure that we are
part of that. We seek active engagement. Probably one of the reasons
I was employed by Tesco in the first place was to promote that
policy throughout the company. We would like to think we seek
that engagement and respond to the concerns. There are a number
of examples of where we have responded to concerns in terms of
limiting the licence and limiting product availability.
Q458 Patrick Mercer: We have already
touched on Mr Green's comments in Nottingham. I am also a Nottinghamshire
Member of Parliament. It is interesting to see the efforts to
bring under control the very widespread alcohol-related problems
in the city of Nottingham. What is your opinion of the proposed
alcohol disorder zones, and to what extent do you think the industry
should contribute towards the policing costs of them?
Mr Chester: I think it is very
difficult for supermarkets to comment on them. Most of our stores
are not a hotbed of underage drinking and disorder. We are nervous
because obviously where they fall within the zone there is a chance
that costs and so on of business will increase, so we want to
make sure that they will have an impact.
Mr Lowman: There is a danger that
alcohol disorder zones will be top down forced partnership working;
in other words, the police or local authority will say that businesses
in an area will do this, this and this. In our experience that
is not how partnership working is most effective. We have concerns
about that. Again, to return to cause and effect we have to be
clear with all these things, whether they are local initiatives
or national policy, that the particular measure of an alcohol
disorder zone will tackle the specific problems that that area
faces. My concern is that given the way the legislation is drafted
and the discussion on it sometimes it may miss the target.
Mr Hayward: Sir Simon Milton who
has just given evidence has made it absolutely clear on behalf
of the LGA that the proposed regulations in relation to ADZs just
will not work. The police and also our industry have also expressed
their concerns about it. As far as we are concerned it is an interesting
idea but in terms of trying to identify the premises it is an
absolute nightmare. On three different occasions the regulations
were severely criticised by the Statutory Instruments Committee
of the House of Lords to the extent that one Member of the Upper
House asked whether there could be a vote, which was quite extraordinary.
I highlight the oddity in ADZs that it is unclear whether supermarkets
will be picked up in any zone. Because of the definition of their
trading they could well be exempt which to the on trade seems
utterly illogical.
Mr Brown: I think that ADZs should
be a tool of last resort. A whole continuum of response that needs
to be tested and put in place before one ever gets to the suggestion
that there should be such a compulsory approach. We would advocate
much closer partnership working that starts to address some of
the cultural concerns around this issue. ADZs are a tool of absolutely
last resort and one can envisage significant difficulties in terms
of their implementation.
Q459 Chairman: I should like to raise
a number of issues that have arisen over the past few days. First,
the Mayor of London has made the decision to ban drinking on the
tube. Does anyone oppose what he has done?
Mr Hayward: We issued a statement
welcoming it.
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