The high cost of alcoholic and soft drinks in licensed premises, and the clear lack of competition in terms of pricing, have been the source of on-going scandal in this State. And yet the political "clout" of the Licensed Vintners' Association and the Vintners' Federation of Ireland appears capable of staving off root-and-branch reform by the Government and of maintaining a system that is inimical to consumers. Exactly two years ago, the Competition Authority initiated proceedings in the High Court for alleged "concerted price-fixing" against the two main publicans' organisations, along with a number of individuals. The legal action followed raids by the Competition Authority on the offices of the various organisations in which documents were seized as part of an investigation into price collusion in the sale of drink. But because of congestion in the courts, the case has yet to be heard.
In a parallel development, the Competition Authority produced a report for the Tanaiste, Ms Harney, at the Department of Enterprise, Trade and Employment, and urged the need for the introduction of real competition into a highly-regulated industry. Specifically, it recommended the removal of barriers to entry to the pub market, particularly in Dublin where prices were up to 12 per cent higher than elsewhere. Anyone who wished to operate a pub, it said, should be allowed to do so if they fulfilled basic criteria and the premises complied with fire safety, health and planning regulations.
The Intoxicating Liquor Bill introduced to the Dail by the Minister for Justice, Mr O'Donoghue, in recent months ignored that recommendation and concentrated instead on extending pub opening hours. There was some movement towards gradual deregulation through allowing a rural licence to be used to open a new premises in Dublin. And restrictions on opening a new pub near an existing premises are being modified. But while such changes were generally welcomed, they did not go far enough.
Excessive drink prices can only be damaging to our tourist industry. Figures published last month by the European Commission showed that when relative purchasing powers were taken into account, Ireland's drinkers faced the highest bills in Europe. One consequence of these prices is that Irish consumers devote 15 per cent of their total private consumption spending to alcohol and tobacco - almost twice as much as their nearest rivals, the British. Mark-ups of three and four hundred per cent have been registered for soft drinks, "mixers" and other alcoholic products in pubs. And while drink price lists must now be displayed by law, there is little variation in prices across the trade.
In recent weeks, independently-owned supermarkets have threatened to challenge the new legislation on anti-competitive grounds before the European Court if it is not amended. They want to be able to sell beer and spirits in towns and villages, where there were often no off-licence facilities, without having to acquire an expensive pub licence. At the same time, sporting organisations have sought changes to the Bill which would allow clubs to host functions on their premises that would be freely open to outsiders. The Minister for Justice may respond to some or all of these demands when the Intoxicating Liquor Bill receives its Committee Stage reading later this month. But the only way to radically reform the system and to bring down drink prices for the long-suffering public is through encouraging aggressive competition. Removing barriers against entry to the trade is the way forward.