Small hospitality businesses should not be saddled with high liquor licence fees if they sell only small quantities of booze, according to the British Hospitality Association (BHA).
The BHA will tell the Independent Review Panel, which is reviewing licence fees, that many small businesses will end up paying more in fees than they make in profit from alcohol sales.
BHA chief executive Bob Cotton said it was unfair on smaller businesses. "Some people won't renew their licences because it isn't worth it.
Hotels are large properties, so they have high rates. A pub would pay a lower licence fee than a 30-bedroom hotel, even if only 5% of the hotel's turnover was from alcohol."
Harry Potts, owner of the Carmel hotel in North Wales, is considering not renewing his licence. The hotel doesn't have a bar, and sometimes doesn't sell alcohol for a week. "We sell alcohol as part of our service, not to make a profit," he said. "If we want to keep that service, we'll have to pay extra, but not make anything. It's absolutely ridiculous."
The licence fee is based on the property's rateable value, and will mean businesses with a rateable value of £33,000 to £87,000 paying £315 to convert their licence, as well as an annual fee of £295. This is on top of costs, such as making detailed plans or paying solicitors.
Tony Orchard, co-owner of the 21-bedroom Burgh Island hotel in South Devon, spent £3,500 on the application, which including getting plans made. "It's complex, and a hideously expensive operation," he said.
Cotton said the fee should be capped and based on turnover or alcohol sales. "The bigger businesses ought to pay more," he said. "A big nightclub turning over thousands and thousands should pay more than a small hotel."
Ian Taylor, owner of the 30-bedroom Cotswold House hotel in Chipping Campden, Gloucestershire, agrees that the fees are unfair. "I think we're being penalised, as it's different from something like a wedding licence. It's one of those things you simply have to have, and we're being caught."