The threatened pubs of Ulster

If you think you've got problems, imagine trying to run a pub in a city where there are bombs going off every few hours. It's not Baghdad or Beirut we're talking about, but Belfast before the peace process.

This April marks 10 years since the Good Friday Agreement firmed up that process and laid the ground for the regeneration of Northern Ireland, a regeneration in which the local pub trade has proudly been a driving force.

Progress has been slow but steady. No one is looking back and as confidence has grown, so has investment.

Belfast now boasts a vibrant bar scene and pubs where standards can match those anywhere in the UK. That quality is extended beyond the capital by a string of locally based multiple operators as well as the independent licensees who dominate the trade here.

Yet this progress is under threat. Not from bombs but from legislation that could undermine a unique licensing system.

Following the rest of the UK, Northern Ireland is facing licensing reform, including 24-hour opening and the transfer of powers from magistrates to local authorities ­ not to mention doorstaff regulation with the upcoming establishment of the Security Industry Authority. But it's the potential loss of the 'surrender' principle that worries the pub trade most.

High values​

'Surrender' is shorthand for the historical check on licence proliferation in which a limited number of liquor licences are sold, like property, from operator to operator. If you want a new licence you have to prove need.

Consequently licences have, over the years, acquired high values, into hundreds of thousands of pounds ­ and the total value of licences is reckoned to be as much as £400m.

Abolition of surrender, first proposed by the British government in its 2005 discussion paper Liquor Licensing ­ The Way Forward​, is therefore likely to cripple many of the small businesses at the heart of Northern Ireland's pub industry.

There are already reports of licensees cashing in their chips and selling their licences before they are made worthless.

It's no surprise then that defeating the plan is at the top of the agenda for the new man on the Northern Ireland pub scene, Stephen Kelly. With a background in urban regeneration, Kelly became chief executive of the Federation of the Retail Licensed Trade for Northern Ireland (FRLT) last September, and has since found himself very much in the thick of it.

As well as lobbying on licensing reform he has waded into the battle over supermarket discounting and has initiated a strategic review of the FRLT itself that aims to better fit the organisation to changing times.

Against a background of economic uncertainty shared by pubs across the UK, these are all daunting challenges. But Kelly is confident and upbeat about the prospects stemming from his belief in the innate strength of the Northern Ireland pub and its ability to capitalise on a growth in tourism.

"Irish pubs are an internationally recognised brand, known for their atmosphere, their quality," he says.

"And tourism is flying in Northern Ireland. There has been a huge increase in flights here from Europe and the US. And Aer Lingus has introduced a new flight from London to Belfast." The local tourism industry has identified five world famous draws that can fill those flights: the Giant¹s Causeway, the Mountains of Mourne, the Walls of Derry, the burial place of St Patrick and the shipyard where the Titanic was built.

Whether pubs get on the tourist itinerary depends on how well they seize the opportunity, and Kelly draws inspiration from those who are diversifying, especially into food and live entertainment.

"It's a mixed bag out there, but the pubs that are performing well are the pubs that have invested in a good product and good service," he says. "The trade is definitely raising its game. There's a lot of music in bars.

"There's an assumption here that people come out to the pub to be entertained.

"Those doing well are investing in their product and their people; they are working at it. Others, when you ask them why they're failing, tend to blame outside factors, the government. We still have the pubs whose customers are old boys drinking half-and-halfs and reading the Racing Post, and they are finding it tough."

Testing times​

For the 20 per cent of pubs that take less than £100,000 a year over the bar, with little scope to diversify, the abolition of surrender will be financially devastating.

"The value of the licence is an asset to any pub business, and for many licensees the value of the licence is part of their pension plan," says Kelly. "Some are getting out now, and selling their licence to supermarkets.

"Some are moving out of pubs into off-sales, which is where a lot of the trade is going. It's a difficult and testing time." There are other aspects of the proposed reforms that the FRLT is objecting to. Like the trade in England and Wales, it wants courts, not councils, to deal with licensing, and Kelly's organisation is willing to concede on hours if that helps it get its way. It is proposing a 2am closing time across the board with pubs able to apply for extensions as necessary.

"We don¹t need 24-hour licensing, there's no need for it," argues Kelly.

"Customers don't want it, and there's no money in it for the trade. We're an early-evening economy, not an early-morning economy. We should be encouraging people to go into pubs earlier to eat." The question of reform has now been taken out of the hands of the UK government and is with the Northern Ireland Assembly, which is due to report in the early spring.

Kelly takes hope from the idea that "now we are getting local decisions made by local people". But why should Northern Ireland have a different regime to the rest of the UK? "This is a different kind of community and you¹ve got to respect that," replies Kelly.

"We have more in common with Dublin than Doncaster and we hope the Assembly will look South rather than to England for the lead on licensing.

"We are in a position to take best practice from the UK and from Ireland and adapt that to our unique social circumstances."

Who is Stephen Kelly?​

Stephen Kelly took over from Nicola Carruthers as chief executive of the Federation of the Retail Licensed Trade for Northern Ireland in September 2007.

For four years before that he was chief executive of the City Centre Initiative in Derry where he worked closely with the licensed trade to improve safety and promote the evening and night-time economies.

Seventy-five per cent of Northern Ireland's 1,200 pubs are members of the FRLT.