New hope for the troubled on-trade

The new coalition Government's policy on licensing will help redress the balance between the on and off trades, says Trevor Watson, director of valuations at Davis Coffer Lyons.

At last! The new Government has announced action to help rectify the imbalance of power between the on and off trades.

Government policy and legislation has previously benefited the supermarkets and penalised the on-trade, an unintended consequence of the new Licensing Act.

The proposed review of the Licensing Act suggests that the new Government has recognised the difficulties confronting many bar and club operators.

The Government has also announced that local authorities will have the ability to increase licence fee charges for premises with late-night opening. Many councils will grab this opportunity with both hands to raise additional revenue and "weed out" surplus licensed premises.

Only operators who are confident in their business and who are generating sufficient trading volumes will want to retain their late licences. There will be an incentive for some late-night bars that may currently open until 1am or 2am to close earlier if it is going to save them in licensing costs. With a smaller number of late-night venues in each town the operators will be able to trade profitability and protect their business.

Clearly, this won't be good news for everybody; in particular, some freeholders. Some clubs and pubs are likely to close or revert to reduced licensing hours. We knew this was going to happen anyway, and I think most people in the industry accept that the oversupply of venues is harming the reputation of the industry as a whole. Tighter controls of this nature will, in my view, lead to a smaller, healthier and more profitable and vibrant sector in the future.

Hats off to the coalition Government for grasping this major social issue quickly and announcing policies that will help protect our industry.