Memorandum submitted by the Association
of Convenience Stores
ACS (the Association of Convenience Stores)
represents over 33, 000 convenience stores (Annex 1). Many of
our members sell alcohol and the introduction of the licensing
act has had an impact, both financially and operationally.
ROLE OF
ALCOHOL IN
CONVENIENCE STORES
Alcohol is an important category for convenience
stores, making up on average 12% of sales figures. However, this
is a small percentage when compared to on-trade premises, whose
primary business is alcohol retailing. Below are the 2006 figures
on the sales contribution of alcohol in different types of convenience
outlet.
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| Shop type | Sales Contribution of Alcohol (%)
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| Symbol group | 16.3
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| Convenience multiple | 12.6
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| Company managed forecourts | 5.4
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| Co-ops | 14.6
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| Sample average | 12
|
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| Figure 1: source IGD Convenience Retailing 2007
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LICENSING FEES
The introduction of the Licensing Act 2003 had a financial
impact on our members, many of whom ended up paying significantly
more in licensing fees as a result. We do not believe that the
current fees are allocated equitably and urge the Committee to
take into account the detrimental impact the new fee structure
has had on convenience retailers.
The cost of a premises licence for most retailers operating
a convenience store falls into band A, B or C. As shown in Annex
B, a retailer whose fee falls into band B has seen their statutory
costs rise from £30 for three years under the 1964 Act to
as much as £425 for the same period under the 2003 Act. This
is an increase of up to 14 times for the premises licence only
(personal licences incur additional costs). This increase has
had a dramatic impact on business costs and ACS estimates suggest
it may have resulted in costs to convenience stores in England
and Wales of over £11.6 million. In most cases, there is
no cost saving in terms of other licensable activities for the
off licence sector.
As well as the statutory licence fee there are also a number
of additional costs associated with obtaining an alcohol licence.
Some examples include:
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| Advertising costs | £120
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| Plan of the premises | £125 (estimate based on quotes received)
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Personal licence holder costs
Including
| |
| Statutory fee | £37
|
| Qualification | £150
|
| Criminal Records Bureau | £30
|
| Lawyer costs | £200 (estimate based on quotes received)
|
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We would strongly urge the Committee to look at some of their
costs, such as the requirement to advertise an application for
a licence in a local paper. The advertisement is rarely seen and
serves little purpose and we would recommend that the requirement
was removed during future legislative simplification works.
In Annex B we estimate that an independent retailer should
expect to spend between £1,089 and £1,289 on obtaining
an alcohol licence. A large part of this fee is the same whether
the retailer is large or small, located in an urban centre or
rural area, whether the retailer sells small amounts of alcohol
or it is the primary part of their business. ACS believes that
these costs are disproportionate and contrary to the objectives
laid down in the Licensing Act (2003) proposals and contrary to
the principles of good regulation.
ASSOCIATED COSTS
There has also been a further burden that is less easy to
quantify in monetary terms. The application process places a significant
time burden on the applicant. Administrative requirements include:
— Drawing or commissioning a scale drawing of the
premises.
— Reading and understanding a bundle of legalistic
and unclear application materials.
— Identifying and serving copies of applications
to eight different authorities.
— Arranging for a declaration of criminal convictions.
— Identifying and undergoing a course and examination.
— Sourcing photographs and arranging for them to
be suitably endorsed.
This burden was particularly intense during the transition
and dual licensing period. Independent retailers are disproportionately
affected by the burden on time since they do not have access to
specialist administrative and legal resources. These accumulating
bureaucratic costs demonstrate that the structure of fees associated
with the Licensing Act 2003 have a disproportionate and debilitating
impact on the off licence sector. The current structure fails
to meet the aim of ensuring that fees are allocated equitably.
ACS urges the Committee to look into the current licensing
fee. In particular, the fee structure is unfair on convenience
retailers for the following reasons:
1. Fee Reduction in other Licensable Activities
The significant reduction in the cost of obtaining a public
entertainment licence for pubs and night clubs has been balanced
with significant increase in fees paid by other licence holders.
Off licences and convenience stores, in the overwhelming majority
of cases, have not required any other form of licensable activity
under the legislation. This has not been reflected in the allocation
of fees.
2. Cost of Administration
Off licence applications do not require the same level of
administrative and enforcement resource, to manage issues such
as:
— access for children; and
— out of hours enforcement visits.
Off licences require less enforcement resource than other
types of premises. ACS urges the Committee to take into account
the lesser cost of administering licences to off licences. The
existing fee structure requires off licences to subsidise the
administration of licences in other sectors which is not fair.
3. Non Specialist Alcohol Retailers
In the original consultation the Secretary of State stated
her desire to ensure that the fee levels are fair and equitable.
However the use of rateable value as a mechanic takes no account
of the reality that in a convenience store alcohol accounts for
an average of only 11.6% of turnover (see figure 1) compared to
specialist on-licence premises where the vast majority of income
is derived from alcohol.
MINOR VARIATION
PROCESS
It is welcomed that the Government is seeking to introduce
a Legislative Reform Order (LRO) to introduce a simplified minor
variation process. The process will save retailers time and money.
However, we are concerned that licensing hours will be exempted
from the process. In the off licence sector it is highly likely
that premises would want to make small changes to their opening
hours. It is a significant frustration that the politicisation
of this issue has overridden common sense. There is no logical
reason why the issue of opening hours could not be a matter for
Local Authority discretion as is the case with other small changes.
We understand that a premise seeking to extend their hours
significantly especially late at night is a matter of considerable
interest to responsible authorities and local residents and should
be a major variation. However this is not the same as a premise
seeking to extend their licensing hours by one hour, for example
on a Sunday from 10am to 9am so as to be consistent with their
opening hours for the rest of the week. Exempting small changes
in licensing hours from the minor variation process means that
for the off licence sector the deregulatory benefits of the process
as a whole are significantly diminished.
FORMS
The introduction of the Licensing Act 2003 has placed a bureaucratic
burden on retailers. In particular the forms are very complex
and the duty for the applicant to copy them to the relevant bodies
can be confusing. The Act needs to be simplified to allow electronic
forms.
CONCLUSION
ACS urges the Committee to reconsider current fee levels
and structure before the interests of thousands of UK retail businesses,
small, medium and large are severely compromised.
ACS welcomes the introduction of a light touch minor variation
process and hopes that the licensing act will be further simplified
in the future, particular in relation to forms. However, we would
urge that Government looks again at exempting licensing hours
from the minor variation process.
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