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Why opening pubs on the Emerald Isle is so difficult

December 06
03:16 2018

FOR A COUNTRY whose chief cultural export is its pubs—there are some 7,000 Irish pubs worldwide, and 8,403 on the island itself—Ireland makes it surprisingly difficult to open a drinking establishment. In both Northern Ireland (part of the United Kingdom, but with many of its own laws) and the Republic, the process is slow, pricey and fraught with uncertainty.

Both use a system familiar to anybody who has ever queued to get into a nightclub: one in, one out. Aspiring landlords must buy licences from those willing to “surrender” theirs. Moreover, buyers must prove local “need” by pointing to a growing population or the closure of nearby pubs. Objections, from existing publicans, say, can cause months of delays. Transfers of licences are approved by courts and dates for disputed cases are hard to come by, says Maura McKay, a lawyer in Belfast.

Getting a licence in Ireland therefore involves lawyers, brokers and far more time and money than in England and Wales, where permits are granted more freely by local councils. Colin Neill of Hospitality Ulster, a trade group, reckons the value of a licence in Northern Ireland is at least £50,000 ($ 64,000). Mark Adams, a licence broker in Belfast, says he has been involved in transactions worth hundreds of thousands of pounds. Lorraine Compton, a lawyer in Dublin, estimates that the cost of a licence in the Republic is €53,000 ($ 60,000). The standard licence fee in England and Wales is a few hundred pounds.

Ireland’s licensing laws can be traced back to the potato famine. In 1845, the first year of the blight, there were 15,000 pubs for 8.3m people. By 1891 just 4.7m people remained and the number of pubs had grown to 17,000. The Royal Commission on Liquor Licensing Laws reported in 1897 that the number of pubs was “out of proportion to the necessities of the inhabitants”.

In 1902 the Licensing (Ireland) Act, passed by Parliament in London, established the one-for-one rule to keep the number of pubs from rising. That was tightened further in the north in the 1920s, before the earlier rule was reinstated in 1971. The number of pubs in Northern Ireland fell from 2,336 in 1971 to 1,210 last year (partly offset by shops that sell alcohol).

Consider JD Wetherspoon, a chain with more than 900 pubs in Great Britain but fewer than ten on the island of Ireland. In 2014 it bought a building in Belfast with plans to open a pub. It acquired an existing licence, and thought a new university campus nearby would help establish need. Yet in January 2018, nine months after it applied, a court turned down its request. The previous licencee had extended his premises, and so invalidated the licence.

The situation is unlikely to change. Proposed reforms of Northern Ireland’s licensing laws, put forward before its government collapsed in January 2017, did not include changes to the surrender principle. Lawmakers south of the border are debating tightening booze laws. Nor is there any demand for loosening from the industry: Northern Irish publicans see it as their retirement kitty. It may not be long before the number of Irish pubs outside Ireland, like the number of people claiming Irish ancestry, exceeds those on the Emerald Isle.

This article appeared in the Finance and economics section of the print edition under the headline “Opening time”

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