The abolition of limitations on the number of pub licences would cut the price of alcohol by 3 per cent, according to the Paris-based Organisation for Economic Cooperation and Development (OECD).

The organisation - which recommends the move as part of a round of major regulatory reform - says that eliminating constraints on pub licences would result in annual savings of as much as 0.3 per cent of total personal expenditure.

A 3 per cent reduction in drinks prices is the equivalent of 6p on a pint of stout and 8p on a pint of lager and would result in annual savings of more than £35 per person aged over 15 in the State, according to figures from the Central Statistics Office.

The OECD also points out that off-licences are 25 per cent cheaper than pubs and says that Ireland spends the equivalent of 5 per cent of GDP on alcohol.

The organisation, in a report on regulatory reform in Ireland prepared with the Government's co-operation, also calls for the elimination of restrictions on the location of pharmacies and on the freedom of pharmacists educated in other EU states to work here.

The report - details of which have already been published in The Irish Times - also calls for the control of education and entry to the legal professions and their removal from the self-governing bodies currently involved.

It advocates more competition in the electricity and telecoms sectors. It says the ESB should be prohibited from developing further plants and should divest existing plants if liberalisation does not develop as expected. The plan should be to liberalise choice for all gas and electricity consumers by 2005 or sooner if there is evidence of liberalised customers being subsidised by captive customers.

On telecoms it calls for a streamlining of the licensing regime using general authorisations, rather than individual licensing.

The OECD also points out that reform generally results in large cost savings as well as increased employment. Annual benefits from reform in the telecoms sector, it says, amount to around £1 billion (€1.27 billion) in addition to extra employment.

It calls on the Government to facilitate labour mobility within the EU and from abroad by recognising professional qualifications.

It concludes that Ireland has consistently missed opportunities to reform sectors from pubs to pharmacies to the energy market and that the result is a system too weak to be protected from powerful special interests and policy which protects the producer rather than the consumer.

Reform, it says, is essential if the cost and length of future downswings is not to be exaggerated.

"Policy must move away from protecting the incumbents against innovation and competition. The strength of the tendency is demonstrated by the ongoing barrier to entry in pubs, in continuous support for anti-competitive regulations like the Groceries Order and the appearance of new constraints in pharmacies and the retail trade."

It adds that the system is "too weak to protect the regulatory system from influence and pressures from powerful special interests, to offset perverse incentives within the ministries and agencies and to co-ordinate the difficult agenda of regulatory reform".

The unfinished agenda is lengthy, it says. It points out that two large players still dominate the telecoms sector. At the same time, State-owned enterprises dominate the energy sector.

It calls for the setting up of a high-level regulatory committee with adequate powers to influence decisions at Cabinet. The central unit in the Department of the Taoiseach should also be strengthened.

A summary of the OECD Review of Regulatory Reform in Ireland is available at The Irish Times website: www.ireland.com