Legal Articles

Specialist articles intended for the professional adviser

HOW WILL THE NEW LICENSING BILL AFFECT YOU?

The Scottish Government has  published its latest proposed reforms to liquor licensing legislation. As this will be the fourth piece of legislation inside a decade, it was hoped that we would have a consolidating statute to make easier reading. Instead we have the sort of drafting mishmash which was the source of annoyance from Westminster, when a mini kilt was sown on to English legislative change. The bill is named the Air Weapons and Licensing (Scotland) Bill. In addition to airguns and liquor, it deals with taxis, scrap metal and sexual entertainment venues.

On the positive side, many of the dafter topics raised at consultation have been shelved. These included additional police powers to require pubs to close when certain football matches were played; boards having powers to vary licence conditions without a hearing: and boards having an obligation actively to promote each of the licensing objectives. Thankfully, garage forecourt shops have also  been left alone.

The proposed changes themselves? Firstly, as expected, the licensing objectives are to be varied to protect young persons ( 16 and 17 year olds) as well as children.

The police have campaigned for a long time for the reinstatement of the “fit and proper person” criterion. This will return as a ground of refusal of a premises or personal licence, and as a ground for review of each. If on review the ground is established, an automatic revocation will follow. The criticism of this test was that it was applied very differently throughout the country. From the licensee’s point of view, one potential saving grace is that the board must have regard to the licensing objectives. The test usually comes into play following a conviction. The rider relating to the licensing objectives means that to an extent, the party in the spotlight can have some protection through Brightcrew. Suggestions at consultation that the legislation might seek to water down the consequences of  Brightcrew have not come to fruition.

On the subject of convictions, it should be noted that section 129(4) has been repealed. That subsection prohibited a board from considering convictions which were spent for the purposes of the Rehabilitation of Offenders Act 1974. In practice, if the police want to introduce a spent conviction, this will take us back to the two stage hearing, where the first stage was a debate on whether or not it was appropriate for the spent conviction to be introduced. An unnecessary complication, I believe.

Overworked clerks will be pleased that they will no longer have to produce a licensing policy every three years. Sensibly the interval for this has been extended by reference to council elections. In the overprovision part of the policy, it has been confirmed that a board may look at its whole area as one unit when assessing overprovision. But I am certain that those same clerks, and council finance directors, will have been as stunned as I by the new duty on boards to produce a financial report showing its income and expenditure and  an explanation as to how the amounts in the statement were calculated. This has to be done within three months of the end of each financial year. I can hear the screams as we speak.

Licensees will no longer be subject to prosecution for failing to notify changes in the details of “interested parties”. Some lip service is being paid to the problems anticipated through revocation of personal licences for failure to comply with the training regulations. Your licence will still be revoked if you don’t retrain and exhibit evidence of this timeously; however, you will be able to apply for a new licence without waiting five years.

Most disappointing were the topics which were not covered, despite significant lobbying, and their non-controversial nature. There will still be no site-only provisional premises licences. The administrative anomalies relating to variations and transfers have been completely ignored. No time, you may say? Yet an eagle eyed draftsman had time to check that angostura bitters, first made by Dr Siegert in the town of Angostura, Venezuela, and having an ABV of 44.7%, had no place in the list of exemptions from the meaning of alcohol. Section 2(1)(b)(iv) will be repealed: variations and transfers will be the same old mess. Hey ho.

MINIMUM PRICING: WHERE NOW?

The Alcohol (Minimum Pricing) (Scotland) Act 2012 is already on the statute book, proposing a minimum sale price of alcohol of not less than £0.50 per unit. It was challenged in a  judicial review taken at the instance of The Scotch Whisky Association. The Outer House decision is now published –  [2013] CSOH 70. Lord Docherty’s judgment is squeezed into 34 pages, despite exhaustive written submissions even before the seven days of hearing. Space permits only the briefest summary of the salient arguments.

 It had been argued initially that this issue was not a devolved matter and was therefore outwith the legislative competence of the Scottish Parliament. As a similar argument had been rejected by the Supreme Court in the case of Imperial Tobacco Ltd v Lord Advocate 2013 SLT 2, this was not insisted on.

The first argument insisted upon was based on the Act of Union of 1707. Articles 6 and 7 provide that all parts of the United Kingdom are to be under the same prohibitions, restrictions and regulations of trade, and liable to the same excise upon all exciseable liquors. It was argued that if there were to be minimum pricing in Scotland but not in England, the result would be a disparity in the United Kingdom common market in alcoholic drinks. That argument was dismissed very shortly.  Lord Docherty pointed out the historical context of Articles 4 and 6. They are not relevant to freedom of trade, nor of the freedom of Scotland and England to pass quite separate laws on such matters as regulation of alcohol.

The next argument was under Articles 34 and 36 of TFEU. Article 34 provides that “quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States”. There seems to be some very strong support from the European Commission and from decisions of the European Court of Justice that minimum pricing will fall foul of Article 34. Lord Docherty correctly does not consider the Commission’s views to be authoritative and seemed to consider the ECJ cases inconclusive. This part of the judgment could be clearer. Applying the European concepts of proportionality and margin of appreciation, the judgment seems to run as follows. Maybe the ECJ has views on minimum pricing, but it doesn’t know about the Scottish  problems with alcohol. The Scottish Ministers can balance the ECJ view with our health and societal issues (ie apply proportionality). Even if they haven’t got it quite right, they’re allowed some scope for error ( ie a margin of appreciation).

A whiff of hypocrisy is detected when the petitioners argue that the Government’s desired result could be achieved by raising excise duties. Their argument was that it would be a good thing if duties were raised instead. At the time of writing a major supermarket is advertising a 70cl bottle of own label vodka for £10.90. Under the minimum price legislation, this would cost £14. The idea that the trade association would accept duty hikes of that magnitude is just laughable.

One of the counter arguments for the respondents was that there could be no guarantee that supermarkets would pass on duty increases to the customer. They might instead opt to keep alcohol at artificially low prices as a loss leader. This would not be possible under minimum pricing.

These were the main arguments. There were a few others but these were mostly, pun intended, scraping the bottom of the barrel. At least one was described by his Lordship as a “startling proposition”.

One thing is certain. The Government has won the battle, but the war is far from over. The case was, of course, appealed to the Inner House. Very sensibly, their Lordships have remitted the case to the European Court of Justice; however, it must be considered doubtful that either side will gracefully accept a decision in Scotland when there is still a right of appeal to the Supreme Court. Sources close to the drinks industry are quietly confident of getting a result in Europe. We shall see, but not for some time yet.

October 2014

 

 

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