The president of the Vintners' Federation of Ireland, Mr Richard Dunne, has predicted catastrophic social and economic consequences, along with worsening levels of alcohol abuse, if the Coalition Government takes action to deregulate the licensed trade. Even in terms of special pleading, the scenario outlined by Mr Dunne at his federation's annual conference in Westport, Co. Mayo, was extreme. It is true that Mr Dunne's members are less guilty than their Dublin colleagues, who belong to the Licensed Vintners' Association, in imposing outlandish prices. But both organisations were charged with concerted price-fixing by the Competition Authority three years ago, following raids on their offices and the seizure of documents, and the case is still wending its interminable way towards the High Court.
The case for deregulation has become compelling. A year ago, figures published by the European Commission showed that when relative purchasing powers were taken into account, Ireland's drinkers faced the highest bills in Europe. As a result, consumers here devote 15 per cent of their total private consumption 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 some alcoholic products in pubs. The situation is most extreme in Dublin where prices are about 12 per cent higher than in the rest of the State.
Earlier this week, Minister of State, Mr Tom Kitt, appealed to publicans to adopt a voluntary freeze on prices until at least the end of the year, after the Consumer Price Index showed that drink accounted for 20 per cent of the latest inflation increase. It was a hand-wringing exercise from a man who had presided over the removal of price controls on the licensed trade when he came to office almost four years ago. Predictably, Mr Kitt received a dusty answer from an industry that has, so far, largely dictated the pace of change to the Government. There are few signs of that situation changing.
Last month, the Coalition Government welcomed an OECD report on regulatory reform that estimated there would be a once-off 0.3 per cent fall in the price index arising from open competition. And it announced the speeding up of an investigation into the licensed trade. This followed failure to act on a two-year-old recommendation by the Competition Authority that anyone should be allowed to operate a pub if they fulfilled basic criteria and the premises complied with fire safety, health and planning regulations. The OECD report noted that, apart from encouraging high prices, the existing, restrictive licensing system resulted in the growth of huge `industrial' pubs, with huge surface areas, in the Dublin region. It also recognised that abolition of the distinction between Dublin and rural licences was a step forward in encouraging competition in the capital.
Mr Dunne's warning of catastrophic economic and social consequences if deregulation was to happen is on a par with arguments once advanced by taxi drivers. There is no basis for his assertion that it would lead to a worsening level of alcohol abuse. If the Government is concerned about such a possibility, however, it could give statutory backing to identity cards for young people.