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 Club Law and Management

Risk Assessments

Clubs are required to conduct a risk assessment of hazards in the workplace and it is important that risk assessments are undertaken on a regular basis. The Club should be seeking to identify potential, likely and unlikely risks and then take steps to ensure that either the unsafe aspects are made safe or that procedures are put into place to circumvent the risk. A recent court case has indicated that not only must an employer show that the equipment used is standard within the relevant industry but that it is also suitable for the specific task it is to be used for. This is relevant to Clubs when considering how stock is moved about and the organisation and management of the Club’s cellar or stockroom.

If an employee can show that they suffered injury as a result of equipment provided by their employer it will be up to the employer to show that the accident was due to ‘unforeseen circumstances’ beyond their control or ‘exceptional events’ which could not be avoided in spite of all relevant due care having being taken. Club Committees should consider the ways that barrels and other stock is moved around the Club and consider if the equipment provided is suitable for particular circumstances in which it will be used. Essentially, systems which create hazards need to be risk assessed. It is important to prevent problems which could be described as ‘reasonably foreseeable’. If a problem is reasonably foreseeable (such as icy weather conditions which causes an employee to slip whilst receiving stock replenishment) then it needs to be dealt with.

Committees should also discuss with their insurance providers any potential problems which are encountered and to understand exactly what they are covered by under their policies and what potential action, or lack of action, will lead to the policy being invalidated. Insurance companies may often have a requirement for a risk assessment to be undertaken and documented a specific number of times per year for example.

Most Clubs will be classified as a low-risk environment after the risk assessment has been performed. As a low-risk environment the minimum first aid provision is:

Once a claim from an employee has arisen it is too late. The key is to be pro-active rather than reactive and consider with an open mind what type of incidents could occur. Working with Club employees to determine how they operate and what equipment they use is key to understanding the potential risks which they face.


Stock Reports and Stock Selection

It is important for all Clubs to be aware of the importance of accurate and regular stocktakes. If there is a problem with the bar takings or bar products then it is a stocktake that will bring any discrepancies to light. The overall result of a stocktake should be a surplus; all deficits should be investigated and explained. The Committee must consider the current allowances for pipe cleaning losses, are the allowances reasonable or do they need to be increased or decreased. Fewer fonts will result in fewer allowances whilst more fonts will result in increased allowances. The Committee should be aware of waste figures and to make sure that the level of waste claims are acceptable and that they have been properly authorised by the relevant person.

The level of the stock being held by the Club should also be considered. Since most suppliers provide weekly deliveries, then the amount of stock held should not be greater than seven average days sales and increased only for special occasions and events (New Year’s Eve for example). Clubs should seek to obtain a gross profit percentage for bar sales of around 55% with an adequate return being made on each product sold. Without this level of return, any Club will find it difficult to turn a profit. If the gross profit is more or less than 55% then the Committee will have to consider the reasons for this and if changes need to be made to the pricing structure. The Committee should also periodically review the products which are sold in the Club. What lines derive the most profits and should therefore be exploited, can the number of products be increased or reduced and are there any current trends which the Club is not following (warm alcoholic and seasonal beverages in the winter, cider over ice and Pimms in the summer for example) which may have a greater gross profit margin than other products.

The Club should also review the percentage of each product which is being sold and make sure that you are not missing out on any major product areas. It is therefore important to compare your sales breakdown to the average breakdown in your own area. Local Clubs and your brewery should be able to assist you with pinpointing local trends. There will be large regional differences so it is difficult to provide a national breakdown which would be helpful to specific Clubs. If information can be obtained for the Club’s local area then you can pinpoint any specific products which are under represented by the Club. For instance, if the Club’s draught sales are much higher than other local Clubs then you may wish to review the offerings in the spirit and bottles categories. Equally, if local Clubs are selling high volumes of wine then Clubs should review their wine selections.

Bottles and can sales have increased significantly in recent years which can have both positive and negative consequences for Clubs. Clubs should not try to stock cans and bottles which directly compete with and cannibalise their draught sales and also, in some instances, provide a smaller profit margin per sale. Bottles which attract a premium price or offer experiences not available through draught products should be considered as they will hopefully complement the Club’s existing draught offering. Innovations within this category such as beer with tequila or flavoured ciders can prove key profit drivers. Stocking new products can help differentiate the Club from the off trade and other local Pubs and Clubs. Bottles, spirits and wine are also attractive to female consumers who may not wish to drink pints and also go well with food offerings.

Clubs should not be afraid to trial new products but equally unafraid to remove products which are not proving cost effective. The Club’s bar space and fridge space are premium areas and the products stocked should maximise the revenue which can be created by these areas. If the Club sells confectionary products then these should also be clearly displayed to encourage impulse purchases. Equally, if the Club has a selection of wines available for purchase then an up to date wine list will encourage not only wine purchases but also purchases of specific wines apart from house white or house red. Clubs can make drinking a premium experience by increasing the number of Premium Spirits and World Lagers stocked with corresponding higher price points. This is known as ‘trading up’ and can be popular with the right products coupled with the right price points. People like experimenting and discovering new concepts and favours and Clubs should make sure that their drinks offering represents something different to products which are easily obtained in the supermarket or in other local licensed establishments.

For almost all Clubs mainstream beer, lager and cider are still the most important product drivers but even mainstream products have to be well served and presented to give the impression of value for money. 44% of all beer and 27% of cider is still consumed in licensed establishments but a premium experience should be offered to differentiate the experience from home.

Essentially, Clubs need to make sure they are offering a great ‘going out’ experience. They have to compete against not only other licensed establishments but with the temptation to purchase cheap alcohol from supermarkets to be consumed at home.

Club accountants R.H. Jeffs & Rowe, based in Pontypridd, and Heineken have provided assistance with this article.


R22 Withdrawal

Clubs may have received information which states that R22, a coolant used in air conditioning and refrigeration units is to be withdrawn from sale from 2015.

From 2015 R22 will be unlawful and AC systems will not be able to be topped up with any R22, whether that be virgin, recycled or reclaimed.

There will be two options for such AC systems:
Option 1: they are replaced by new AC equipment

Option 2: alternative modern refrigerant is used to top them up. This will normally involve having to replace parts of the current AC system.

We are liaising with industry contacts to determine if this will have a major effect for Clubs and, if so, what the best solution will be. It is likely that an industry wide response will be forthcoming in due course. We suggest that Clubs hold off making any decisions until this situation becomes clearer.


Linneweber 1 Update

Clubs which previously submitted a claim and received a refund for cases taken under Linneweber 1 should be aware that HMRC were successful with their appeal of this case and as such will now be seeking repayment of money previously paid to Clubs who submitted this claim. There is a prospect of a further appeal to the Supreme Court although it seems that HMRC will seek repayments prior to such an appeal taking place.

There is not yet a definitive time frame for when HMRC will start writing to Clubs but action is believed to be commencing over the next few months. Any Club which has difficulty repaying HMRC should contact the ACC for financial assistance. If any Clubs are unsure over their potential liability for Linneweber 1 claims and, therefore, potential liability now then please also let us know and we will confirm the Club’s situation.


Unfair Dismissal

Reforms relating to the qualifying period for Unfair Dismissal have come into effect with all employees who have commenced their employment after the 6th April 2012. Anyone employed after the 6th April 2012 will now have to have been employed for two years before being able to claim that they have been unfairly dismissed which is an increase from the one year period that applied to persons employed prior to the 6th April 2012. There are still circumstances which allow an employee to claim that they have been unfairly dismissed prior to the two year qualifying period being completed. An employee can bring a claim for unfair dismissal at any time if they consider that they have been dismissed due to any of the following reasons: pregnancy, maternity leave (or similar), health and safety (such as reporting a health and safety risk or acting as a health and safety representative), working time (such as refusing to opt out of the 48-hour week), the national minimum wage and trade union membership or activities.


SKY TV Update

The Premier League is steeping up enforcement action against Pubs and Clubs who are using European Systems to broadcast Premier League football. The Premier League have successfully prosecuted Pubs and Clubs for copyright violations which stem from the broadcast of Premier League Logo’s, graphics, anthems etc. There is still discussion over where the final line will be drawn regarding the use of these copyrighted materials but the Premier League is taking an aggressive stance on this point stating that they have already visited 4,000 Pubs this season. We have consistently advised Clubs not to use European Systems until this issue is resolved and the licensed trade in general is waiting for a High Court judgement to determine the ultimate outcome. Premier League inspectors have no automatic right of access to Private Members’ Clubs.