Government consultation on airport alcohol sales risks unnecessary red tape and costs for retailers

The Government’s potential restriction on sales of alcohol at airports risks adding unnecessary red tape and costs to one of the UK retail and leisure industry’s biggest success stories, says RPC, the City-headquartered law firm.

The Home Office is considering extending the Licensing Act to cover airside alcohol sales at airports, and has issued a call for evidence on the issue*. This could result in airport bars being prevented from selling alcohol during early morning hours, reducing the attraction of airports for retail and leisure spending.

A restriction on airport alcohol sales would also result in airports being liable to a range of new costs, including:

• Business rates – retailers already pay £7bn per year in business rates, which is projected to rise by a further £2bn over the next three years**. Airport bars would be hit particularly hard, as they would likely have to pay rates based on the value of the entire airport rather than just the bar space. Rates for alcohol supply businesses can be up to £1,905 for the first year, and £1,050 per year after that

• Late Night Levy – costs up to £4,400 per year

• License fees

The call for evidence, which aims to reduce the problem of drunk passengers on flights, closes on February 1 2019.

UK airports are widely regarded as a world leader in retail, with the CEO of Heathrow recently describing Terminal 3 at Heathrow as “the most successful airport retail space anywhere in the world.”

RPC says that restrictions on the retail and leisure industry would be considered poorly-timed by many operators, considering the level of job losses that have taken place in the sector in the last year.

The issue of airport alcohol licensing is referred to in RPC’s Retail Compass publication, released this week. Retail Compass aims to help businesses in the retail sector plan for legal and policy changes over the next six months in the six key areas of commercial, data protection, corporate, employment, real estate and tax affairs. RPC’s Retail Compass can be downloaded here.

Ciara Cullen, Partner at RPC, comments: “The success of British airports as retail destinations has been the envy of the world over the past decade. It is worrying that the Government is considering hampering that by increasing their red tape and cost burden.”

“UK airports have done a fantastic job of ensuring tourists begin their foreign holiday spending in the UK and not overseas. Given the pressures the sector is facing, both retailers and airports will be wondering why the Government would want to make that more difficult.”

“While reducing drunkenness on flights would undoubtedly be a good thing, there are surely other ways of dealing with the issue without restricting the huge majority of people who do drink responsibly.”