The recent increase in drink prices - in the region of 5p to 12p on the pint and not 20p as shrilled by Consumer Affairs Minister Kit - has once again focused attention on deregulation of the pub trade. Politicians, academics and the media argue, usually without facts to support their views, that deregulation of pubs, as with taxis, would lead to lower prices and better service for the consumer.

It was argued that taxi deregulation would lead to a better public service. Little, if any, emphasis was put on lower fares. In reality there is a huge difference between deregulating taxis and pubs. Apart from the fact that alcohol is a mood-changing drug requiring a completely different approach in law, there are other basic differences. By comparison with taxis, market research carried out in the drinks industry consistently shows that the standard of service in Dublin pubs is highly regarded by the public.

In addition, the pub trade in Dublin has much greater physical capacity to serve the public. There are 720 pubs in the region, with an average maximum capacity of 200 customers per house. Compare that with the taxi trade with 3,000 cabs - maximum capacity four passengers in most cabs.

Critics argue that there are too few pubs in Dublin. In fact the number of pubs is in line with other local retail sectors - 830 grocery stores, 410 other drinks outlets, 320 butcher shops, 480 pharmacies and 510 newsagents. It's not that there are too few pubs in Dublin - there are too many uneconomic pubs in rural Ireland.

Admittedly, there are underpubbed areas in Dublin. This is not because of the licensing laws. It is more the result of urban planning that has ensured that new suburbs contain fewer retail outlets than exist in more established areas.

Drink prices vary widely in the Dublin region. A pint can cost £2.30 in a suburban outlet and around £3 in a bar/ nightclub. There is no guarantee that an increase in the number of pubs would lead to lower retail prices. Drink prices in Cork, Limerick and Galway are much the same as in Dublin, although these cities have more pubs per 1,000 population. Greater volume throughput keeps prices down in Dublin, despite higher labour, rates, rents and other overheads.

Dublin prices are also much lower than in other European capitals.

The following table shows the prices for average European centre city draught beers for 2001. (Litres have been converted to pints and prices to Irish pounds.

Ranking

Amsterdam 355p 5

Brussels 390p 4

Copenhagen 410p 2

Dublin 240-270p 7

London 320p 6

Paris 510p 1

Vienna 405p 3

In Dublin, the planning code is the main obstacle to new pubs coming on stream in residential areas. In settled localities, booming house property values means residents' objections to such developments are usually successful. Why does the licensed trade want to maintain regulation, even in the attenuated form in which it now exists after the passing of last year's Intoxicating Liquor Act? The answer is to maintain high standards, hence keeping the Dublin pub as the capital's prime leisure attraction. Open a pub on every available corner in Dublin and rock-bottom standards will follow. Drink prices might fall in the short-term, but with uneconomic throughput, higher labour costs because of endemic staff shortages and little in the way of economies of scale, they would rise in the long term.

Decision-makers should look closely at what has happened in the UK. Deregulation in Britain has seen the demise of 10,000 traditional pubs in 10 years. Mainstream drink prices have not fallen, but deregulation has opened up a sub-stratum of cheap, cut-price pub groups, offering little by way of standards or services but contributing much to public disorder and alcohol abuse. Is that the way we should go in Ireland? Frank Fell is chief executive of the Licenced Vintners Association and a member of the Commission on Liquor Licensing