Commissioned by Stormont’s Department for Communities, the study identified significant flaws in the system’s design, enforcement, and operation, leading to calls for urgent reform.

One of the key concerns is that existing businesses, such as pubs, can block new licence applications, reducing market competition. The study also criticises the "surrender principle," which requires anyone opening a pub or off-licence to buy a licence from an existing business willing to give it up This system disproportionately benefits large supermarkets and convenience stores, which can afford to outbid independent pub owners.

"While the surrender principle protects existing pub licensees in a challenging environment, it does not appear to support growth in the pub sector as a whole," the report states. To address these issues, the study recommends replacing the surrender principle with a per-population cap on the number of licensed premises.

A proposed Northern Ireland Licensing Authority (NILA) would manage this new system, introducing a time-limited buy-back scheme. Under this plan, licence holders could sell their licences to NILA at a fair market price, after which the resale of remaining licences would be prohibited. These bought-back licences would then be reissued through an application process, with businesses that had surrendered their licences temporarily barred from reapplying.

Dr James Nicholls, one of the report’s authors, highlighted the sector's struggles, stating, "There are many great pubs in Northern Ireland, but the sector is in long-term decline. Under the current licensing system, most pubs that close are replaced by off-licences, while the reverse is almost never the case”.

The campaign group Free The Night welcomed the findings, with co-founder Holly Lester stating, "Northern Ireland's nightlife has been held back for too long by an outdated system, limiting cultural expression and economic growth”. The recommendations will now be considered by the Minister for Communities, who has six months to respond.