By Steve Bargeton, political editor

THE SCOTTISH Government yesterday got the green light for a massive hike in alcohol licences for pubs and supermarkets.

The increased charges will cost the industry £20 million a year and some landlords have said it could put them out of business, while others have warned that the prices to customers will have to rise.

At present, all pubs pay an initial fee of £172 for a three-year licence with further fees for renewals.

But under a new licensing regime which takes effect next year, some could pay up to £2000.

Ministers have defended the move pointing out that the current licence fee covers only 63% of the running costs of operating the system, with local taxpayers footing the remainder of the bill—effectively subsidising pubs and retailers.

The increased charges cleared their final hurdle yesterday when the Holyrood justice committee decided not to block the move.

Patrick Browne, of the Scottish Beer and Pub Association, said, “This means that we get £20 million in costs, with limited scope for getting that back in two or three years’ time, by which time the damage will be done.

“I think there will be marginal businesses that will no longer continue to trade after September 2009, and I think there will be increased costs which will be passed back to the customer.”

Justice secretary Kenny MacAskill said it was for those who profit from the sale of alcohol to pay off the costs of regulating it.

“Tackling the consequences of alcohol needs leadership from government and that means taking tough decisions,” he said.

“I’m willing to do this and take action. I believe these regulations, which stop the taxpayer subsidising the cost of our licensing system, are an important step in that direction.

“Those who profit from the sale of alcohol have a responsibility to help pay for the costs and I’m glad that we’ve seen sense and will have a fee system that makes sure those who are selling alcohol pay for the system that gives them the privilege to do so.”

The minister said it was unacceptable for council taxpayers to subsidise the licensed trade.

“For big operators like pub chains and supermarkets with many premises across Scotland the change will cost much more than for some of the independent regulators,” he said.

“With the improvements to the licensing system, we need to move away from the outdated and dogmatic mindset that selling alcohol is a right.

“It is not, it is a privilege, and the privilege to profit from the sale of alcohol comes with associated costs.

“We cannot expect the council taxpayer to subsidise the licensed trade.”

Pat Watters, president of the Convention of Scottish Local Authorities, welcomed the increased licence fees.

“I am delighted that the committee has sensibly concurred that the principle of full-cost recovery and the proposed fee levels properly balance the interests and concerns of individuals, businesses, consumers and communities across Scotland,” she said.

“For too long taxpayers have had to pick up the tab and today’s decision by the justice committee goes some way to righting that wrong and sending out an important message about responsibilities for tackling Scotland’s binge drinking culture, root and branch.”