DRINKS promotions and happy hours could be introduced in Jersey after the Island’s competition watchdog suggested bans on pubs and restaurants offering deals on alcohol should be scrapped.
Last year a research project was launched by the Jersey Competition and Regulatory Authority after the Attorney General requested information on the pros and cons of allowing bars, pubs and restaurants more leeway in running price promotions such as ‘happy hours’ and ‘two-for-ones’.
The impact of selling alcohol below the minimum price limit of 50p per unit of alcohol was also investigated.
In the results published by the JCRA, which studied evidence from Guernsey and Scotland, it found: ‘From an economic perspective, the pricing restriction on the on-licence trade should be removed to allow on-licences to price freely.
‘This would ensure that benefits of competition and innovation are passed on to consumers in the form of lower prices.
‘Businesses would benefit from more flexible pricing, which would allow them to smooth any troughs in demand/ increase footfall in quieter periods. It could also facilitate new entry, as new entrants would be able to make introductory offers to attract customers.’
They said that no other jurisdiction studied had a similar pricing restriction.
The report continued: ‘The restrictions on promotion for the on-licence trade, when considered from an economic perspective, should be removed or eased. The restrictions limit on-licences’ ability to compete and to attract price-sensitive customers. They may also affect the level playing field in the market.’
The JCRA said that evidence from other jurisdictions, such as Guernsey, showed that promotions could be used responsibly.
In 2020 the States approved a proposition lodged by Deputy Lindsay Ash calling for regulations to be relaxed to allow on-licence and off-licence alcohol price promotions. However, the report will be referred to the Licensing Assembly – who will have the final say on whether the changes are made.
However, the reintroduction of price promotions may face opposition from hospitality firms. When the idea was first discussed shortly before the States debate, the then chief executive of the Jersey Hospitality Association, Simon Soar, said that they could erode profits in a sector which had already suffered heavily during the Covid-19 pandemic.
Current JHA chief executive Claire Boscq-Scott declined to comment on the JCRA findings when contacted by the JEP.
Guidance issued by the Attorney General in 2019 upheld the existing position in Jersey, whereby the introduction of alcohol price promotions is opposed on the basis they encourage consumers ‘to drink to excess’.
The report by the JCRA also suggested that restaurants, pubs and bars should consider ‘alternative measures’ to ensure any introduction of promotions does not lead to excessive drinking.
This included the removal of licences if promotions are not used responsibly, an increase on excise duties on some products, minimum unit pricing to be used across on and off-licence venues and better education on health risks associated with excessive drinking.
The JCRA added that the off-licence sector should review the impact of minimum unit pricing.
‘The Covid-19 restrictions placed on the on-licence trade has seen demand from off-licences rise substantially. The effect of minimum unit pricing and eventual adjustments to the level should be explored once the impact of these has passed,’ the report found.
