Liquor Licensing – More Regulation on its Way
Posted: Thursday 8 July 2010
The first anniversary of the implementation of the Licensing (Scotland) Act 2005 will be with us very soon. While the licensed trade has required to comply with a major increase in its regulation in order to comply with that piece of legislation, more of the same is on its way.
Following the introduction of the public smoking ban in 2006, the Licensing (Scotland) Act 2005 (“the 2005 Act”) contained specific statutory objectives including the protection and improvement of public health, and the protection of children from harm.
Scotland has long been seen as “the sick man of Europe”. Against that background, the Scottish Government is currently promoting the Alcohol, etc (Scotland) Bill in accordance with its strategy on tackling alcohol misuse in this country. In its Stage 1 Report on the proposed legislation, the Health and Sport Committee reported that in 2009, the equivalent of 12.2 litres of pure alcohol were sold in Scotland for every person over the age of 18. There is general consensus it is appropriate for the Government to take action now in order to reduce alcohol consumption in this country, but, that is accompanied by significant controversy over some of the steps in terms of which it is proposed to do that.
The main aims of the Alcohol, etc (Scotland) Bill are:
- Minimum pricing, intended to reduce alcohol consumption
- Restriction on off-sales promotions and promotional activity
- A requirement for an age verification policy
- The introduction of provisions concerning the modification of licence conditions
- The introduction of provisions concerning assessment of the impact of off-sales to those under the age of 21
- The introduction of provisions concerning a social responsibility levy
It is clear from consideration of the Stage 1 Report, that some of these aims are more controversial than others.
Minimum Pricing
Without doubt, it is this aspect of the proposed legislation which is the headline grabber. At present, Canada is the only country which operates any form of minimum pricing on alcohol. While Scotland may wish to be seen as a progressive country in introducing radical measures to curb binge drinking, this proposal does not have overwhelming support as a means by which a significant improvement in public health will be achieved.
The Government’s proposal is that every premises and occasional licence would be subject to a further mandatory condition that alcohol must not be sold on the premises below the minimum price. The minimum price would be calculated by a formula based on the strength and volume of the alcohol to be sold, and subject to a minimum price per unit, which would be set by the Scottish Ministers.
Concerns have been expressed that the introduction of a minimum price per unit may not be compliant with E.U. Competition Law. There has not been support for this in Parliament and it remains to been seen whether or not minimum pricing of alcohol will become part of the Scottish legislative framework for the sale of alcohol going forward.
Drinks Promotions
One of the most important aspects of the 2005 Act was the banning of “happy hours” and irresponsible drinks promotions in the on-trade. Many involved in the licensed trade felt that these provisions were unfair, as those involved in off-sales remained free to sell alcohol at very low prices, including “Buy One, Get One Free” promotions and the like. Particular criticism was levelled at the activities of large supermarkets which were essentially using alcohol promotions as loss leaders.
The proposed legislation will extend the ban on the supply of alcohol for free, or at a reduced price on the purchase of other items, to off-sales. It is further proposed that a restriction be placed on the location of promotional materials to the alcohol display areas.
These provisions are not seen as controversial, and indeed, are likely to be welcomed by the on-trade as correcting an oversight in the original drafting of the 2005 Act.
Age Verification
It is proposed that a mandatory condition be attached to all premises licences to the effect that every operating plan must contain an age verification policy in respect of the sale of alcohol to those thought to be under the age of 21. This is unlikely to be controversial as it is something which most premises will have in place already.
Modification of Mandatory Conditions
It is proposed that the 2005 Act be amended to empower Scottish Ministers to add, delete or amend the mandatory conditions attached to premises licences as necessary or expedient for the purposes of compliance with the licensing objectives.
More controversially, there is also a proposal that the 2005 Act be amended by the introduction of new matters in respect of which licensing boards may vary the conditions to attach to all or a group of premises licences. Not only could this lead to a further piecemeal approach to liquor licensing across Scotland, those involved in the licensed trade fear that this could provide a mechanism whereby licensing boards could introduce major changes to premises licences without the requirement of holding a hearing.
Social Responsibilty Levy
The cost to the public purse of dealing with the problems caused by binge drinking is significant. This does not just affect the NHS, but also impacts on local authorities as they require to deal with the effects of anti-social behaviour, often linked to excessive alcohol consumption. It is the view of the Scottish Government that some of the additional costs incurred by local authorities in dealing with anti-social behaviour should be borne by those profiting from the sale of alcohol.
This remains an item of controversy with trade concerns regarding the manner in which such a levy could fairly be applied across the whole of the on and off-sales sector. Whilst still a matter for further debate, it seems that the original concept of “polluter pays” is too complex, and will be likely to be replaced with a universal levy with incentives for licensees demonstrating compliance with an agreed level of good practice.
While there is undoubtedly an urgent need to tackle Scotland’s alcohol problems, one wonders whether the measures currently proposed by the Government will achieve the desired effect without causing a further administrative and financial burden on our hospitality industry, which is already facing challenges in the current economic climate, and following the introduction of, not only, the 2005 Act but also the smoking ban.
We await with interest the Bill’s parliamentary progress.
Susan Leslie, Senior Associate
