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Morning Briefing for pub, restaurant and food wervice operators

Fri 6th Mar 2015 - Friday Opinion
Subjects: Giving nightclubs a break, classification confusion and an accommodation break-through
Authors: Kate Nicholls, Peter Holden and Ann Elliott


It’s time to stop clubbing our nightclubs by Kate Nicholls

The live music and clubbing scenes in the UK are rightly recognised as some of the most vibrant and progressive in the world. Establishments such as Ministry of Sound, Fabric and Cream are known around the globe and succeed in attracting tourists from across the UK, Europe and beyond. The UK is a popular destination for clubbers looking to enjoy a night out in one of our towns or city centres and we should be justifiably pleased with the reputation we have managed to craft for ourselves.
This was the message that the Prime Minister put forward when endorsing the UK music scene and creative industries at last week’s Brits awards. It is also a message that the Mayor of London, Boris Johnson, acknowledged when he supported Ministry of Sound in its planning battle with residential property developers. Both at a national and local level, government wants to plan positively for growth in this dynamic and vibrant sector of licensed hospitality.
The popular, mainstream activity of clubbing is to receive acknowledgement and encouragement from the lofty realm of high art with the news that the Tate Modern’s Turbine Hall at Bankside will be transformed into a nightclub for two nights in May. UK nightclubs are now so firmly entrenched in the social and cultural zeitgeist, that they warrant their own commemoration through artistic expression at the country’s foremost modern art gallery.
So why is that our late night economy feels more clubbed to death than celebrated, vilified not vaunted?
Late licences are routinely met with opposition, pubs and clubs are routinely blamed for anti-social behaviour and local authorities have the power to tax and stifle late-night licensed businesses. Established venues now find themselves at odds with residents, battling against noise complaints and fighting unreasonable planning laws. We seem happy to celebrate nightclubs in our art galleries, but barely able to tolerate them on the high street.
London’s historic 12 Bar, a venue that had hosted Adele, Pete Doherty and Jeff Buckley, was closed earlier this year to make way for redevelopment of the area, following the likes of Madame Jojo’s, The Astoria and the Mean Fiddler into darkness. Our historic music venues and thriving nightclubs are increasingly finding themselves at risk of closure because of the widespread development of neighbourhoods, planning restrictions or voracious local authorities. Although our music venues are lauded as some of the finest in the world, they are finding it increasingly difficult to remain open.
The introduction of blanket breathalyser tests for clubbers in Birmingham, Croydon and Shrewsbury arguably does little to help the reputation of venues in those areas and poses another question for the sector. Licensed hospitality is working hard to tackle any perceived problems regarding alcohol-related disorder and partnership schemes such as Best Bar None and Purple Flag are bearing fruit. This latest development has the power to undermine much of the good work we have been doing, and runs the risk of effectively criminalising all customers, the majority of whom are well behaved. Mandatory breath tests on the door are intended to root out drunken customers before they enter the premises: the reality may be that increased pressure is placed on door staff, disorder is shunted outside into the queue and the reputation of nightclubs as enjoyable, welcoming venues is significantly diminished.
Blanket requirements to breathalyse customers are viewed with hostility by many guests too – like polycarbs and football shirt bans, they send a subliminal but clear message to those thinking of entering, that this venue is trouble. Some will walk away, others will decide not to visit the town centre at all – badly affecting early evening trade. A recent survey of the public in Birmingham, where this scheme is being trialled, showed an adverse public reaction to the measure, with many saying they felt criminalised – not the feeling you want your guests to have on the door!
If problems exist at a particular venue, we believe that a more sensible approach may be to investigate voluntary, partnership and data-sharing schemes before going ahead with blanket breathalysers. Coupled with ID Scan, drug dogs, knife arches and biometric checks, they all give an impression of an industry under siege, and only result in more tension. We want to see customers enjoying themselves, and we want to see them doing it in a safe and supervised environment. We need to be careful to ensure we do not push any perceived problems out of sight as well as pushing our customers away.
We are approaching a curious state of affairs in which our nightclubs are celebrated in the arts world while becoming increasingly restrictive in the real world. The dance floors of Ministry of Sound and Fabric are being recreated in the Turbine Hall in an approximation of the club scene whilst the nightclub dance floors themselves may soon become quiet.
It is good to see our cultural heritage being acknowledged, but it will be for nought if the real thing is allowed to disappear.
Kate Nicholls is chief executive of the Association of Licensed Multiple Retailers

Is it a pub or is it a restaurant or hotel, and why this matters by Peter Holden

The new Pubs Code will only apply to tied pubs – but is not intended to apply to tied restaurants and hotels. So what exactly is a tied pub? The answer is, it has to be occupied under a licence or tenancy and the main activity or one of the main activities has to be the retail sale of alcohol.
I recently visited one of the eateries near where I live with a small party. It looked like a pub on the outside, had a pub sign outside it, with a very traditional pub name, and it looked like a pub inside – albeit with a small drinking area and more tables than you might have expected. It was, however, food-led and, unquestionably, a restaurant. Was the sale of alcohol one of the main activities there? It certainly was!
If you are finding this confusing, read on …
The provisions of the Small Business Enterprise and Employment Bill which relate to pubs are not intended to refer to restaurants or hotels. How do we know this? Baroness Neville-Rolfe said so in the House of Lords on 28 January: “… clause 68 … is an important clause, as it is the means by which we can ensure that the definition of a 'tied pub' does not inadvertently capture a restaurant or hotel premises.”
Many of us think that we know the difference between, on the one hand, a pub and, on the other hand, a restaurant or an hotel. In many cases we do, but many of us have been to a pub and could not be absolutely sure whether it is correctly described as a restaurant or as an hotel.

The government appears to be alert to this issue and Lady Neville-Rolfe, again, said: “We are already aware of a fish and chip restaurant chain that may meet the definition … and … there could be other … cases”.
The government has clearly struggled to find an acceptable definition but the definition that they have decided on, so far as the Bill is concerned, seems to have caused them some difficulty and she went on to say: “We all think that we know a pub when we see one and we think we know the difference between a pub and a fish and chip shop, but increasing food consumption in pub, gastropubs and so on has made separation by legal definition more complex.”
Lady Neville-Rolfe continued by saying that the Bill would provide a power for the Secretary of State to exempt a particular type of tenant or premises from the Pubs Code, but by secondary legislation (this means by statutory instrument). The intention is: “that only pub premises are … [within the] scope [of the legislation]”.
Leaving aside the unappealing logic of the Government position (why do they think it will be easier to define exempt premises in a statutory instrument when a definition of the pub itself is proving so difficult in primary legislation?) they would do well to learn the lessons of history.
Why does this matter? There are two reasons:

• If you are bound by the Pubs Code and all that entails you need to know what a tied pub is, and what is not included.
• If you are not bound by the Pubs Code you might be part of self-regulation and this could mean continuing with the Industry Framework Code (IFBB is reported to have “committed” to this). As the Industry Framework Code is likely to refer to tied pubs you need to know what they are.
Landlord and Tenant Act 1954 and Taylor v Courage Limited
This issue has occurred before. This arose in connection with the Landlord and Tenant Act 1954 and, in the parliamentary debates for that legislation, the government minister said that: “licensed restaurants and hotels are in part 2 but the ordinary public house is outside it.”
The intention of the Act, as originally enacted, was to ensure that pub tenants would not have the benefit of the security of tenure provisions of the Landlord and Tenant Act 1954 although restaurant and hotel tenants would have that protection (this was subsequently changed in 1990). Nonetheless, the government had exactly the same issue in that they wanted to provide a clear distinction between, on the one hand, pubs and, on the other hand, restaurants and hotels.
In the present Bill the definition is in the following terms: “the main activity or one of the main activities carried on at the premises is the retail sale of alcohol to members of the public for consumption on the premises.”
The definition in the 1954 Act, providing that such premises would fall within the Act, was in very different terms: “premises which are structurally adapted to be used, and which are bona fide used, for a business which comprises one or both of the following, namely, the reception of guests and travellers desiring to sleep on the premises and the carrying on of a restaurant, being a business of substantial proportion of which consists of transaction other than the sale of intoxicating liquor.”
This definition was the subject of a decision of the Court of Appeal in Taylor v Courage Limited and I have had some personal experience of litigation in several other cases. Why the government did not seek to follow the wording of the 1954 Act, albeit updated, is not completely obvious. In Taylor v Courage Limited the precise question turned on the word in the section: “premises which are … used, for a business which comprises … the carrying on of a restaurant”
It was reported, in that case, that more than 50% of the takings of the business came from food as opposed to drink, even if soft drinks, tea and coffee et cetera were included with intoxicating liquor under the heading “drink”. In the case of the current Bill the definition is directed to “activities” and, therefore, the emphasis is taken away from the test being the relevant proportion of takings. The reader will wonder why the government did not follow the earlier definition, albeit updated.

A restaurant would not be very much of a restaurant if it did not sell intoxicating liquor. How can it be said that the sale of fine wines, spirits et cetera is not one of the main activities in a restaurant? Nonetheless, if it is one of the “main activities” it would appear to fall within the definition of a tied pub. Can this be right?
Indicative factors
The lessons from previous cases, including Taylor v Courage Limited, can give us an insight into how to decide whether the retail sale of alcohol is one of the main activities at the premises. Factors will include but not be limited to:

• What is the percentage of the takings which relate to alcohol? The proportion of alcohol to non-alcoholic drinks and food is clearly a factor.
• If alcohol comprises more than 50% of the takings it is going to be difficult or impossible to argue that it is not a main activity at the premises.
• What if the proportion is 25-40%? It is possible to envisage a restaurant having alcohol sales within that range. Is that a main activity? In such a case you would have to consider some other factors of the type set opposite.
Many people think (and I am one of them) that they can tell a restaurant when they see it and it is true that often you can tell very quickly. However this is becoming more difficult. We must then consider:

• Lay-out and adaptation of the premises.
• Can you drink at the bar?
• If you can drink at the bar, do people drink there when not waiting to eat?
• Can you order food at the bar?
• Are orders for food taken away from the bar – perhaps at the table?
• Is there a drinking area and how is it used?
• Is the furniture and fit-out consistent all the way through?
• Does everyone receive the same menu and service?
• Are tables laid up in advance?
Readers will have their own views of the factors which indicate a restaurant or a hotel and this is not an exhaustive list. The question is, will the government learn the lessons of history!
Peter Holden is a partner at the law firm Freeths

Airbnb is an accommodation break-through by Ann Elliott

I am not an early adopter, so I have come late to the concept of Airbnb ( My son used it when he went to Melbourne last year at short notice and slept on a bed on a mezzanine floor while the owner of the flat slept below him on a pull-out bed. Not my idea of a great experience.
Airbnb has seen rapid growth though from its inception in 2008, when two roommates could not afford the rent for their loft in San Francisco, so they converted their living room into bed and breakfast  accommodation, with room for three guests on air mattresses. The concept lets travellers rent private spare rooms and entire homes as an alternative to traditional hotels or B & Bs. With 800,000 listings in 192 countries, Airbnb is now the largest peer-to-peer hospitality service. It had 10 million visitors in 2014 and doubled its revenues to $250m in 2013 against 2012.

Four out of five Airbnb hosts in the UK rent out only the home they live in, 85% of Airbnb guests want to “live like locals” and guests stay on average 4.6 nights (against 3.1 nights for typical visitors to the UK).

So earlier this year, when I had to find accommodation for a couple of nights in Cape Town, I looked at Airbnb. It was a revelation. We could have stayed in literally hundreds of places from sumptuous flats overlooking the sea to a spare bed in a shared apartment. We might have been OK with the latter, but my 85-year-old dad may not have felt so comfortable navigating his way around a stranger and his bits and pieces in a shared bathroom.
In the end I chose Gilga Wine farm in Stellenbosch, which was £330 a night for the five of us – so around 60% of the cost of three separate rooms in an average hotel. The house was unbelievable, the process dead easy and the whole experience a joy.
A bit emboldened by my modest success, I then looked for another house on Airbnb, this time in Southbroom, south of Durban which I wanted to book for that evening. I found about four houses, received responses back very quickly and chose and booked one in an hour. OK, that is maybe not as quick as picking up the phone to a B&B, but very easy nevertheless.
The house was in a great location overlooking the sea, clean, spacious, beautifully decorated, matched the photographs (crucial), was convenient and had a cleaner who washed and ironed our clothes. It was all far better being on our own than in an indifferent hotel or an average B&B.
Airbnb is brilliant for owners of rooms. In London it is an increasing trend for owners of one-bed flats to kip on someone else’s floor for the night and earn £100 for letting out their own room – seven nights of dossing somewhere else ( and returning the favour to friends too) means they can pay their mortgage. For those over-50s whose kids have left home, have a big house but do not want to go down the full B&B route, it can be a nice little money earner.
Airbnb now has around 10% of the hotel market place and its set to grow. Not everyone likes it – the taxman, for sure, isn’t fond. Some local authorities don’t like it; Barcelona being one. Hotel companies certainly don’t like it. Some owners have come back to find their house not quite as they left it. Some guests have not always found rooms (and bathrooms) to be as clean as they would have liked.
But it is enormously democratic. I left a review for the Southbroom house which was made public. The owner then wrote a review about our family (luckily positive) which was made available to other Airbnb operators for when we want to book again. That is a real incentive on both parts to be as nice and constructive as possible and avoid the public displays of bitterness you see on TripAdvisor.
I think it provides a brilliant opportunity for some pub and restaurant owners to find unused space, convert it into bedrooms and then put them on Airbnb. They have not much to lose and a lot to gain.
Ann Elliott is chief executive of the leading sector marketing and public relations firm Elliotts –

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