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Memorandum submitted by British Retail Consortium (BRC) (PC 06) Introduction
1. The British Retail Consortium (BRC) is the lead trade association representing the whole range of retailers, from the large multiples and department stores through to independents, selling a wide selection of products through centre of town, out of town, rural and virtual stores. We represent approximately 80% of the grocery retailing sector, the vast majority of which sells alcohol as part of its retail offer.
2. We are grateful for this opportunity to provide written evidence to the Policing and Crime Bill Committee and to set out our views on the key issues of importance to our members contained in the Bill
Overview of BRC Position
3. The BRC does not believe that further legislation and regulation is the appropriate way to deal with alcohol related anti-social behaviour. We do not think that the evidence from the KPMG report justifies a mandatory code for the off trade and we believe that existing legislation contains enough powers to deal with the problems this Bill is being used to tackle. We believe evidence-based, partnership approaches are more successful in tackling rogue traders and we also believe far more needs to be done on the demand side of the problem. Greater awareness, more education and effective public campaigns will further help drive the change in the public's approach to alcohol. We also believe that targeting the minority that cause the problems is a better approach than adding further costs and burdens to the whole of the alcohol industry.
4. We are also disappointed that so much of the detail of the mandatory code is not included in the Bill. By leaving the detail to regulation, we are unable to comment at this time on specific aspects of the code, operational difficulties associated with it and other concerns about the ways in which the Licensing Act will be altered.
5. Furthermore, the BRC is concerned that local competition could be affected by this legislation. Any local variations in price and promotions will have an impact on where and when consumers shop which could have an impact on the viability of local businesses and local communities. Moreover, the Competition Commission highlighted strong competition as a key aspect of grocery retailing that benefits consumers. It would therefore be counterproductive for these regulations to adversely affect competition.
Background information
6. BRC members sell alcohol as part of their wider grocery offer. Typically customers purchase alcohol as part of their weekly or monthly shop and they value the convenience that supermarkets bring. Alcohol comprises less than 10% of a supermarket's turnover and alcohol only sales make up less than 1% of total sales.
7. Supermarket customers are not buying alcohol in this way for immediate consumption. The alcohol purchased is typically consumed in the home, with family and friends over a time frame that suits the customer. The vast majority of a supermarket's customers are responsible and are taking advantage of economies of scale that multiple retailers can provide. In the current economic climate, this is particularly poignant.
8. BRC members take their responsibilities regarding the sale of alcohol very seriously and they understand that an alcohol licence brings with it significant responsibilities. BRC members regularly go above and beyond the law in introducing voluntary initiatives designed to help staff better comply with the law and to assist consumers make well informed choices about the alcohol they purchase.
9. For example, in 2006 BRC members universally adopted a 'Challenge 21' approach to underage sales. This brought about a cultural shift amongst young people as they now expect to be challenged for identification in a supermarket. It also saw test purchase failures fall by 60%. The BRC was a key founder of the Retail of Alcohol Standards Group (RASG) and continues to be an active member. RASG has driven retailers' success in tackling underage sales through many avenues including sharing best practice and the successful launch of Community Alcohol Partnerships throughout the country, which have been shown to be an effective tool against anti-social behaviour. On 15 January 2009, RASG launched 'Challenge 25' which takes the principles embedded in the 'Challenge 21' policy further. This demonstrates retail's continued commitment to do as much as it can to eliminate underage sales and help staff feel confidant about challenging the age of customers when purchasing age-restricted products.
10. Moreover, the KPMG Review of the Social Responsibility Standards, which was published in July 2008, did not identify the off trade as the key actor in alcohol related anti-social behaviour, which is the focus of the Policing and Crime Bill. KPMG highlighted several examples of irresponsible activity in the on trade and, whilst the research did conclude that the voluntary industry standards should be made mandatory for the whole of the alcohol industry, it was clear that the principles of the standards were followed more thoroughly in the off trade.
11. BRC members have also adopted the Department of Health's voluntary labelling scheme which includes clear information regarding the alcoholic content of products and the Government's recommended guidelines. This is currently being rolled out on members' own brand products with currently nearly 60% of these products bearing the label. The BRC made a commitment to the EU Alcohol Platform that all own brand products will include the label by December 2009.
Specific Concerns
Clause 31: Mandatory Licensing Conditions relating to Alcohol and Schedule 4: Mandatory licensing conditions relating to alcohol
12. The Government is proposing to introduce a new mandatory Code of Practice for alcohol retailers in Part 3 of the Policing and Crime Bill. We are concerned that the enabling powers laid down in the Bill will fundamentally alter the Licensing Act and we are keen that any alterations made do not have the consequence of further restricting responsible retailing businesses.
13. It is very far from clear what the actual aims and objectives of this part of the legislation are.
14. Parliament is being asked to approve enabling powers at a stage when Ministers have not decided the scope or extent of the mandatory conditions. There cannot therefore be proper and effective parliamentary scrutiny. The speed at which this Bill is being progressed could mean that it has been debated before a consultation on the specifics of the mandatory code contents is completed. All stakeholders need to see what is being proposed in terms of the maximum of nine mandatory national conditions and what is to be included in those mandatory conditions being made available for local authorities.
15. There are enough powers available already to set conditions on licensed premises and take action against premises that break the law. These powers need to be used in a targeted and proportionate manner. Only a small minority of retailers are deliberately flouting the law and enforcement authorities already have the power to take away their licences.
16. The Mandatory Code will add significant burdens and costs to responsible businesses who will almost certainly be adhering to the good practice, but will now have to spend time and money demonstrating compliance to the authorities.
17. In particular, the RIA on the affect of a code of practice for the alcohol industry identified significant costs that could be borne by the alcohol sector if mandatory server training was included as a condition. Despite retailers already being identified as having training schemes in place, should this training have to be accredited, costs to the whole industry have been estimated as up to £151m in the first year. Given the high turnover in the retail sector, we are concerned that the costs of this possible condition will remain high. It seems illogical to impose conditions with such significant costs associated on all of the alcohol industry, especially when it is known that some aspects of the trade already participate in the suggested activity. Grocery retailers have demonstrated through their high test purchase success rate that their training practices are working well and staff have a firm understanding of the law. This example highlights the illogical thinking behind imposing a mandatory code of practice regardless of current activity.
18. We are not clear why the figure of nine has been selected as the maximum number of mandatory conditions which could be imposed on licensed premises. It would be useful to explore with the Minister why he has proposed this figure.
19. The power to impose general mandatory conditions in particular localities would mark a step change from the original intention of the Bill whereby Licensing Officers would work with premises individually to tackle whatever problems exist and could inadvertently direct those businesses' operating plans. Setting blanket conditions for whole area could also penalise responsible premises that happen to be in an area experiencing problems.
20. For example, if the power to set price and promotions policy were to be included in the list of available local conditions, there could be a real barrier to free and fair competition in the market place. Outlawing multi-buy promotions in the off-trade (a condition suggested when the code was announced) could inadvertently make it illegal to sell wine by the case.
21. There could be perverse outcomes if, for example, one local authority takes a different approach from its neighbour in terms of the requirements it sets on retailers in its area(s). This will also make it extremely hard for national businesses who could be asked to operate different business models in neighbouring areas.
22. This would also have a detrimental affect on local competition which, as highlighted earlier, is a key benefit to the consumer. If a consumer cannot find a particular product in their local shop at a price they expect, they will inevitably go elsewhere and do all their grocery shopping there. Modern day consumers are not so loyal to a particular company that they will continue to shop there if they know there are different prices and promotions elsewhere. Therefore, local variations will simply change the way in which people shop. This could then impact on footfall and the viability of the local area. At the current time, more than ever, retailers of all descriptions are understandably concerned about any moves that would impact upon the retail offer.
23. The change in role for Licensing Officers will necessitate extensive re-training to enable them to be adequately qualified to deal with their new role. We also suspect that legal fees would substantially rise as formal LA decisions are likely to be challenged much more than the informal, consensual approach which many are able to adopt at the moment.
Clause 26: Increase in penalty for offence
24. Clause 26 increases the maximum fine for consuming alcohol in a designated public place from level two (currently £500) to level four (currently £2,500). However, no person since 2004 has been given a fine of more than £250 meaning that the current £500 maximum fine has never been used. We do not therefore understand the logic of altering this at this time.
Clause 27: Selling alcohol to children
25. Clause 27 amends the offence of persistently selling alcohol to children from three occasions to two occasions within three months. Under the existing provisions a person guilty of an offence under this section shall be liable, on summary conviction, to a fine not exceeding £10,000. In addition the court has the power to suspend the licence for up to three months. The Bill also contains the provision to accept an immediate 48 hour closure notice in lieu of prosecution. There is no evidence that the current offence is not effective and the Home Office Toolkit cautions against using this power, suggesting enforcement authorities should instead pursue a review of the licence.
26. Moreover, evidence from test purchasing operations has demonstrated that positive engagement between the premises and enforcement officers is highly effective in reducing the number of failures. As such, further changes to regulation should not be considered at this time. The current offence is still relatively new and the BRC believes that it would be wrong to amend further so soon. Instead, following the principles of better regulation, the effectiveness of the current law should be monitored and retailers and enforcers should work together to eliminate underage sales, rather than focus on yet more changes to regulation.
Clause 28: Confiscating alcohol from young persons
27. Clause 28 amends the police's power to confiscate alcohol from young people in a public place so that they no longer need to prove that the individual intended to consume the alcohol. This amendment also requires the young person to give their name and address to the police, and allows the police to return the individual to their home or a place of safety if they are under 16. This would give greater powers to the police and increase the deterrent effect. The BRC is supportive of this clause as we feel greater involvement of responsible adults, ie parents, is essential if we are to change young people's attitude to alcohol. We have consistently argued that it if we are to be successful in tackling young people's relationship with alcohol then action has to take place at both ends of the equation. Therefore, we welcome this measure to take action against those found with alcohol and the involvement of appropriate adults.
Clause 29: Offence of persistently possessing alcohol in a public place
28. Clause 29 introduces a new offence of persistently possessing alcohol in a public place. Young people under 18 can be prosecuted for this offence if they are caught with alcohol in a public place three times within a 12 month period. The main concern with this clause is that police do not keep records of young people stopped in possession of alcohol in a public place and therefore making a case for persistent possession would entail considerably new bureaucracy and record-keeping.
Clause 30 Directions to individuals who represent a risk to disorder
29. Clause 30 extends the police's powers to issue Directions to Leave under section 27(1) of the Violent Crime Reduction Act 2006 so that they can be issued to persons aged 10-15. The BRC is pleased to see acknowledgement that children of this age are to be considered in measures designed to reduce anti-social behaviour but we are concerned that the police must use these powers sensibly and not in any way risk the children's safety.
Conclusion
30. Overall, as this evidence makes clear, the BRC's main concerns regarding this Bill relate to the implications of the proposed mandatory code of practice for responsible retailers and the lack of information contained on the face of the Bill. The BRC accepts that irresponsible vendors of alcohol should face strict sanctions, enforcement activity and intervention however we do not think responsible sections of the industry should be affected. Nor do we want to see responsible consumers unfairly penalised. We are concerned changes will be costly and bureaucratic for ALL alcohol retailers, not just those that are behaving irresponsibly. The off trade has consistently demonstrated a commitment to responsible retailing and helping consumers make informed choices. We also believe there already exists a considerable range of powers available to the police and other enforcement bodies to tackle the issues highlighted by this Bill. The BRC wishes to engage in constructive discussion as the code is developed and is therefore disappointed no more information at this time for the Bill Committee to consider properly the measures that may be included. We hope the Committee is given an opportunity to consider the detail of the Code as legislation progresses.
January 2009 |