STATE LIQUOR

Dominion, Volume 11, Issue 251, 11 July 1918, Page 6

STATE LIQUOR

. 9 OVER £400,000,000 FOR BRITISH PURCHASE RECOMMENDATIONS OF COMMITTEES Tho committees appointed lo inquire into tho State purchase and control oi the liquor trade in England and Wales Scotland, and Ireland have issued theii reports. These committees were ap pointed in Juno last, becauso the Gov. ernraent had formed the opinion that "it n.ay shortly bo necessary as an urgent war measure to assume control of the manufacture) f.nd eupply of intoxicating liquors during the war and tho period oi demobilisation, and that such control would involve the purchase after tho war of the interests concerned." They were asked to report on tho terms upon which those interests should be acquired, considerations of financial or general policy not being included. Tho English and Scottish Committees estimate the terms of purchase as follow :— England and Wales ,£r>o,OflO,ooo Scotland .- .£61,000,000 The Irish Committee only give materials for an estimate, and taking the three reports together tho gross total appears to .be ?omcwhi\t more than .£.100,000,000, but substantially less than .K00.0f10.000. Agreed Principles. On general principles the three committees came to the following conclusions:— 1. That control can only be assumed under a statutory pledge of purchase, and that the State, as from the assumption of control, should have alisolute freedom cf action in consolidating and reorganising the trade according to ils will, . 2. That the principle of the purchase consideration by a simple capitalisation of net profits is proper for the majority of tho interests concerned. 3. That the profits to be go capitalised must be the pre-war profits, and that tho effect of war conditions on profits, whether favourable or.tho reverse, must be excluded. _ i. Wholesale dealers, allied trades (sub. ect to a special provision for maltsters), the- major portion of hotels, clubs, railway refreshment rooms, theatre bars, passenger vessel bars, and dining cars, and the non-liquor part of mixed businesses to be excluded. The Committee for England and Wales recommended the establishment of a Statutory Purchasing Body, which should be empowered fo call for any information from tlio vendors that may be necessary to'onablo it to estimate the value of the concerns 'to bo purchased. They indicate purchase terms thus: Breweries.—Fifteen years' purchase of net profits over four years, 1010-1913. On-Licenses.—Owner of house; an appronriato number of years' purohase of net rental. _ Beneficial lessee: Proper share of capital value of fee simple value of premises. Occupier (tied or free): (1) Chattel interest at a valuation. (2) Two j£ars? purchase of not profit for personal goodwill of an annual tenant—more if on. a lease with more than two γ-eare , nnexpired term. (3) Pensions 'if sorvices not retained by State. Off-Licenses.—No interest in the promises to be acquired except in exceptional circumstances. As to occupiers: (1) Chattel interest at a valuation; (2) if on annual tenancy two years' purchase of net profits for goodwill; (3) if on longer term and ,a pre-1002 license the number of years' purchase based on une.xpired term. Pensions and Compensation.! . Tt is pointed out in the English report that if the State acquire all the breweries and all the publichouses in England and Wales a very large number of persons will lose their occupations by the closing of redundant breweries and houses and tho consequent concentration of occupations. "It is truo that many, though not all, would enter or have tlio chauco of entering the service of the State in similar capacities, but in many cases there would be a change of status, and many -persons would be dispensed, with altogether." Scales of compensation aro therefore proposed, based in principle on Civil Service rules. Comneneation, if assessed at or under .£SOO, should be paid in cash." License holders trading on their own account, with 'thejr wives and families employed for their whole time in the business, should be compensated for loss of employment—the license holders pensions at one-half Civil Service rates and wives and. families gratuities of one week's pay for each year of continuous employment in tho licensed trade. Whok time employees on tho wages list whn are diseniployed are aIBO recommended for gratuities of a week's pay for each year of continuous employment. Distilleries, The English Committee make no recommendations as to distilleries pending the Scotch and Irish' reports, The Scotch Committee lecomnund seven yeai\s' purchase of the 1911-13 profits, and the Irish Committee 12 years' purchase of Hie 1910-14 profits. As regards Scotland, the rights of local option after 1920, under the Scottish Temperance Act of 1913, have influenced tbe report of the committee. The ccftmnitteo recommend for breweries eight years' purchase (h.wd on present conditions) of the.net profits for 1911-13, covering all the assets of Scottish breweries except stocks. The English Committee in their report say that the purchase consideration should be satisfied by the creation and allotment of a special inscribed stock redeemable at the option of tho Government after 20 years. This stock should bn secured in tho first instance en the surplus revenues of the aggregate acquired concerns and their assets, andfurther by. way of guarantee as to in» terest upon the Consolidated Fund. A suitable , sinking fund should be provided out ofi the surplus revenues of the acquired co.'ftenis, aftiy payment of the interest.