Liquor Licensing review recommends reform

An independent report is recommending major reform of the Liquor Licensing System in Northern Ireland – including the establishment of a new Northern Ireland Licensing Authority.

The review, led by the University of Stirling’s Institute for Social Marketing and Health (ISMH), also suggests the ‘surrender principle’ – a one-in-one-out system designed to limit the number of licensed outlets – should be reformed to protect both public health and the pub sector.

The review, required under Section 23 of the Licensing and Registration of Clubs (Amendment) Act (Northern Ireland) 2021, uncovered several “deep-seated problems” with the current licensing system’s design, operation and enforcement and has put forward a set of recommendations to the Minister for Communities, who has six months to respond.

Commissioned and funded by the Department for Communities and led by Dr James Nicholls and Professor Niamh Fitzgerald, the research team carried out interviews with businesses, police, regulators, health services, and elected officials, and visited pubs across Northern Ireland – meeting hospitality and retail owners and staff – and carried out research in eight varied communities, involving community focus groups.

Economic impacts

Economic impacts of the current licensed trade sector were analysed, as was the location and volume of premises including in relation to alcohol-related deaths, hospital admissions and crimes. Around 1,700 paper licensing records were manually reviewed in courts across Northern Ireland to identify in detail changes in the types and location of licences over a 10-year period.

The research found that pubs were closing in both urban and rural areas, with most surrendered licences being bought by small-to-medium sized grocers. The costs associated with acquiring a licence also created barriers that made it difficult for new pubs to open. Therefore, while the surrender principle protects existing pub licensees in a challenging environment, it does not appear to support growth in the pub sector as a whole.

Rates of alcohol related deaths in Northern Ireland are high compared to those in England and Wales, and trending upward. The review found that alcohol-related harms – deaths, hospital admissions and crimes associated with alcohol – are substantial and linked with areas where there are higher numbers of premises. Health harms are especially linked with the relative number of off-licences in a given area.

Long-term decline

Dr James Nicholls said: “There are many great pubs in Northern Ireland, but the sector is in long-term decline. Under the current licensing system, most pubs that close are replaced by off-licences, while the reverse is almost never the case.

“The existing system was established over a century ago to tackle over-supply, but we believe reform can continue to effectively manage availability while better supporting the pub, bar and cultural venue sector in the long run. For example, by addressing the high cost of licences on the private market and an objections system that benefits incumbent businesses – both of which can stifle innovation and reduce diversity. At the same time however, existing businesses have genuine concerns about the future and reform needs to reflect this.

“Many of the issues we identify have been raised in previous reviews, and we are not the first to propose reform. Change involves managing the needs and aspirations of a wide range of stakeholders and communities, we recognise that this is a challenge. However, our proposals seek to strike a balance between these competing requirements: supporting pubs, enabling innovation, protecting health, and modernising a system that has, in many respects, remained unchanged for decades.”

False choice

Professor Niamh Fitzgerald said: “Over the course of this review, we heard from many different groups and communities with wide-ranging views. Community members expressed a desire for a greater diversity of bars but felt no need for additional off-licences. Our analysis of deaths and hospital admissions due to alcohol, found that both are more strongly linked to off-licence numbers than pub numbers. Meanwhile, many of those running existing pubs welcomed the cap on pub and off-licence numbers created by the surrender principle, whilst those working in public health were also keen to retain a cap in some form.

“Too often reform of the licensing system has been presented as a false choice between the status quo and a free for all. The reforms we propose would retain a cap on premise numbers but allow for expired licences to be re-allocated to offer consumers something new. The reforms would also limit off-licence numbers to avoid a free for all and protect public health, whilst fixing deep-seated problems in the system that will otherwise persist.”

Findings

Other review findings regarding the current licensing system included:
•    The current ‘surrender’ principle is doing little to protect or invigorate the pub sector and is associated with a continuing drift of licences from pubs to shops.
•    Key agencies often lack the capacity, knowledge and powers to enforce licensing laws comprehensively and efficiently 
•    Police, other regulatory authorities and the general public often struggle to navigate the licensing system due to a lack of simple, clear information.
•    The current system creates additional expense for licence applicants in multiple ways including a lack of transparency in the market for licences, a costly system of objections to licence applications from competing businesses, poorly defined criteria for court decision-making, and bureaucratic processes. 
•    The system for maintaining licence records is archaic, with records held on paper, and a charge for public access, which is out of step with both Great Britain and (the Republic of) Ireland, where licensing registers are digitised and available to the public online for free.
•    The current licensing system creates barriers to diversification and innovation in terms of both the range of alcoholic products available to consumers, and the types of venues licensed to retail alcohol for consumption on the premises.

26 detailed recommendations for reform have been put forward. The full report ‘Independent Review of the Liquor Licensing System in Northern Ireland including the Surrender Principle’, with an Executive Summary, a two-page briefing and appendices, can be found here.