Although the Scottish Government’s plan to introduce minimum pricing was defeated last year, The Alcohol etc (Scotland) Act 2010 was passed. This amends the Licensing (Scotland) Act 2005 and introduces new requirements on the licensed trade including the introduction of a mandatory Challenge 25 policy and significant new restrictions on off-sales promotions. The majority of the changes come into force on 1 October 2011.

Age Verification

As of 1st October all licensed premises must have the equivalent of a ‘Challenge 25’ policy in place. For many years a number of shops and bars have operated a ‘Think 21’ or ‘Challenge 25’ policy. The new provisions in the Act introduce a mandatory requirement to have at least a ‘Challenge 25’ policy in place.

Licensed premises must have a policy that “steps are … taken to establish the age” of a customer who appears to be less than 25 years old. Operators can increase the age on their policy if they wish but the base line is 25 years. Acceptable identification is a passport, EU photo driving licence or PASS card. If premises do not have such a policy in place, they will be in breach of their licence conditions. This could lead to the licence being called to review.

In practical terms, it is recommended that licensed premises have a written age verification policy with regular training and monitoring. Any breach of the policy by staff members should be treated as a disciplinary matter. Some operators employ independent companies to carry out test purchases using 19 and 20 year olds to test the policy in action. Having such measures in place demonstrates to Boards that the policy is actually followed by all staff in practice rather than simply being a paper exercise. Having this sort of system will place licence holders in a solid position should any questions be raised as to whether they are complying with the age verification requirement on their licence. It will further assist licence holders to establish a ‘due diligence’ defence to any criminal offences arising from under-age sales.

Off-Sales Promotions

There are major changes to the way off-sales promotions can be offered. The majority of the restrictions on price promotions introduced by the 2005 Act related to the on-sales trade. The new Act appears to be an attempt to redress the balance. As of 1st October, the mandatory conditions on off-sales licences will include:

• A ban on promotions linked to the number of units being bought – eg Buy one get one free, 20% off when you buy 6 bottles, 3 for £10;
• A ban on selling multi-packs at a price cheaper than the total cost of the single units. ie if an operator sells individual bottles of beer for £2, the 4-pack of bottles cannot be sold for less than £8. However if the operator does not sell the bottles individually, there is no restriction on the price of the 4-pack;
• Shops cannot advertise their drinks promotions throughout their stores. Any adverts must be restricted to their designated alcohol sales areas. Further, the shop cannot have adverts on bill boards etc for their promotions within 200 meters of their store;
• Any price variation promotions must be applied for a minimum of 72 hours, commencing at the start of a trading day.

Given the restriction on the price of multi-packs some big operators may move away from any single unit sales of bottles of beer and ciders so that they can offer multi-packs at existing prices and offer discounts on them. Some smaller convenience stores may be disproportionately affected as they are more likely to sell single bottles of beers and ciders. If they continue to do so, their multi-pack prices will be prohibitively high. They may decide to stock certain brands as single units only and other brands as multi-packs only to be able to offer both at competitive prices. A further way to offer the products at competitive prices is to offer single units of bottles and multi-packs of cans or vice-versa.

The Government’s Guidance to the new provisions confirms that the multi-pack price restriction only applies to identical products – ie a 500ml bottle of cider can be sold for £2 and a 4 pack of 500ml cans of the same brand of cider can be sold for less than £8. However if the retailer wants to sell a 4 pack of bottles, that pack needs to be sold for at least £8. Click here for further information on the Government's guidance.

Notably the new provisions still allow off-sales promotions offering reduced price products but such reductions will have to be for a single unit only rather than bulk buy offers.

Further changes

There are a number of other changes which come into force on 1st October including :

• A ban on Licensing Boards including a presumption against off-sales to under 21s in their licensing policy;
• The ability for Licensing Boards to introduce variations to conditions attached to licences to all licences or categories of licences in their area (such as introducing a specific number of door staff in city centre premises);
• Limitations on the number and duration of occasional licences the Licensing Board can issue;
• Mandatory consultation by the Licensing Boards with the local health boards in respect of their statement of licensing policy, overprovision determinations and any new applications for new premises licences or major variations;
• The introduction onto the licensing forums of a member nominated from the local health board;
• Provisions to allow consultation on the introduction of a social responsibility levy on licence holders;
• An annual reporting requirement on licensing issues by Chief Constables to their local Licensing Boards (commencing in April 2012).

Further information

For further information on the issues raised in this Legal Update, please contact Sara Grewar or Lesley Johnston.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.