Bulletin - Licensing - July 2011

welcome to our latest licensing bulletin

This issue includes comments on a new minimum pricing bill for Scotland, new mandatory premises licence conditions that come into force as of 1 October 2011 across Scotland, pub lottery machines, general entitlement for bingo and arcade premises and finally the review of the Gambling Act 2005.

If you would like to discuss any of the issues covered in this bulletin, please get in touch with a member of our team.

SNP Press on with Minimum Pricing for Scotland
New Alcohol Mandatory Conditions – 1 October 2011
Pub Lottery Machines
Bingo and Arcade Machine Entitlements
Westminster Review of Gambling Act
The Tobacco Register

SNP Press on with Minimum Pricing for Scotland

It will come as no shock to anyone involved in licensing in Scotland that the SNP are set to press ahead with a new minimum pricing bill. Although they tried, and failed, three times previously, with the new mandate the balance of power has shifted and they no longer need the votes of the other parties. Nicola Sturgeon said at the beginning of July: “Minimum pricing has a very important role to play in addressing Scotland's problems with alcohol. It is one of the early bills we will bring forward when parliament returns after recess. We will work hard to build broad support.”

She does not need to work too hard when it comes to Liberal Democrat input. They have already turned about face on this key issue, with new Scottish leader William Rennie announcing in June: “Alcohol misuse continues to blight the whole of Scottish society, wrecking individual lives and harming families and communities. I have seen and heard the terrible impact when I am talking to people on doorsteps. I believe that radical action is needed and will therefore support moves to introduce minimum unit pricing in Scotland. The UK Government has announced plans to ban below-cost selling of alcohol south of the border. This will not apply in Scotland. Instead, the majority SNP Government plans to reintroduce a Minimum Pricing Bill and I will work positively with ministers on this.”

The concept of minimum pricing still enjoys a healthy dose of cynicism from certain sectors and the Scotch Whisky Association, amongst others, remain doubtful that such legislation is legally competent.

Back to top

New Alcohol Mandatory Conditions – 1 October 2011

The Alcohol etc (Scotland) Act 2011 has introduced new mandatory premises licence conditions and these come into force as of 1 October 2011 across Scotland. There is no mechanism for returning existing licences to be “updated” with the new conditions so it is presumed that they will simply have effect even if not shown on the licence. To require all licences to be returned all over Scotland would be an administrative and costly nightmare! The new conditions are:

1. Multipack bans

“A package containing two or more alcoholic products (whether of the same or different kinds) may only be sold on the premises at a price equal to or greater than the sum of the prices at which each alcoholic product is for sale on the premises”. Phew – what does that mean?! If an operator sells single cans then he cannot sell a multipack of those cans for a price less than what it would cost if buying the cans individually. If a can of Tennents is £1, then 4 cans must be sold at £4 and 20 cans must be sold at £20, and so on. The rule does not apply if the premises does not offer “singles” of that product.

2. Price variations for off sales

You will be familiar with the condition that prohibits price variations unless 72 hours has passed. This means that licence holders must maintain the same price for a product for at least 3 days, and the price can only go up or down at the start of a period of licensed hours. There has been a very subtle change to this condition. Currently the wording says the price for “that or any other alcohol” cannot be changed. This has been interpreted to mean that if you change the price of Jacobs Creek Chardonnay (for example), you could not then change the price of any other brand of wine. The new rule (s.3 of the 2010 Act) simply says “that alcohol”, thereby dropping the “or any other” from the condition (as far as off sale premises goes – the existing wording remains for the on-trade). This allows the off trade to vary prices of different brands as they see fit, so long as each products price variation lasts for at least 72 hours.

3. Extension of existing “irresponsible promotions” to off sales

The following irresponsible promotion will be extended to off sales “the supply of an alcoholic drink free of charge or at a reduced price on the purchase of one or more drinks (whether or not alcoholic drinks)”. The effect is that two-for-one type deals and other “quantity discounts” such as three bottles of wine for £10 will be illegal.

4. Location of drinks “promotions”

A new condition relating only to the off-trade is a ban on the location of so-called “drinks promotions”. “Promotion” in this sense means “any activity which promotes, or seeks to promote, the buying of any alcohol sold on the premises for consumption off the premises”. The rule states that such promotions can only be used in the designated off sale display area – this is the area you agreed with the licensing board at the time your licence was granted and is shown on your layout plan. This means you cannot have posters or anything of that sort on display unless within the designated area. This new conditions has a few exemptions but is likely to be troublesome. If you are concerned please contact us for advice.

5. Mandatory “Challenge 25”

Many off trade operators already operate “challenge 25”, that is, if the customer looks under 25 then they must prove they are 18 in order to purchase alcohol. But the Government has now made it a condition of every licence in Scotland that such a scheme is formalised and this must be implemented no later than 1 October 2011. If the operator has a Mandatory 25 policy in place, then great – but it now needs to be put on a formal, written footing. Premises with no policy need to create one and have it in place for 1 October. The rule comes in at midnight on 1 October which is a Saturday night. This news has not been met well by the on trade! Again if you unsure about this please contact us as soon as possible.

Back to top

Pub Lottery Machines

A number of companies are now specifically targeting pubs offering the free installation of lottery machines. We are talking here about machines which dispense a pre-printed lottery ticket or scratchcard, sometimes called “pulltab” machines. The player puts his £1 (or other stake) in the machine and a ticket is dispensed. He then checks to see if the ticket is a winner, and if he is a lucky punter, then he collects his winnings from behind the bar. The good news is that there is NO LICENCE requirement for these lottery ticket machines. This is because they are treated as a form of lottery available to certain type of charitable society; and so long as 20% of the proceeds from the sales of the tickets go to a good cause, and the promoter of the lottery is properly registered with the local authority, then the machines do not need to be individually licensed. There is something to watch out for. These lottery machines are easily confused with specialist lottery ticket machines known as B3A machines – machines specially categorised under the Gambling Act 2005. Category B machines cannot be used in pubs at all and are normally only found in member’s clubs. The difference between the licence free lottery ticket machines, and the illegal lottery ticket machine (so far as pubs go), is a very subtle and tricky little quirk: the legal machines contain tickets which are pre-printed and therefore the outcome of the lottery is pre-ordained before the machine is stocked; on the other hand, the illegal machine is one where the machine itself determines the outcome of the lottery.

Back to top

Bingo and Arcade Machine Entitlements

Secondary legislation, which came live as of 13 July 2011, has increased the maximum stake for B3 machines as well as the general entitlement for bingo and arcade premises, who have successfully lobbied the Government for some assistance as those industries are experiencing particular difficulties in the current economic climate. The new rules are as follows:

• Stakes for Cat B machines: the maximum stake will rise from £1 to £2
  
• Cat B entitlement for bingo and arcade premises: the proposal is that these premises will now be allowed to have an unlimited number of B3 machines, so long as the number does not go above 20% of the overall number of machines in use at the premises.

The change to gaming machine entitlements may has an unforeseen consequence for certain operators. In some cases, the maximum number of machines is stated on the premises licence – where that is the case, and if the operator is disadvantaged, they may require to seek a variation of the licence to have the limits updated to reflect the new rules. Operators concerned about this should contact us for advice.

Back to top

Westminster Review of Gambling Act

A DCMS Select Committee review of the Gambling Act 2005 is underway. Consultation ended on 30 June 2011 and we await the Committee’s findings. Part of the review is to consider the financial impact on the gambling industry as a result of the GA 2005, as well as ancillary concerns such as the efficiency of the Gambling Commission. The full list of considerations is as follows:

• How effective the Act has been in its core objectives to: ensure that gambling is maintained crime-free and conducted in an open and fair manner, protect children and vulnerable people from the adverse effects of gambling, and also to update the legislative framework with regards to online gambling;
  
• the financial impact of the Act on the UK gambling industry;
  
• the effectiveness of the Gambling Commission since its establishment, and whether it represents good value for money;
  
• the impact of the proliferation of off-shore online gambling operators on the UK gambling sector and what effect the Act has had on this;
  
• why the Act has not resulted in any new licences for casinos or “super” casinos;
  
• the effectiveness of the classification and regulation of gaming machines under the Act; and
  
• what impact the Act has had on levels of problem gambling.

Lindsays hopes that this review is a chance to iron out the problems with the GA 2005, of which there are many. This is especially true from the Scottish perspective where a number of drafting issues mean that the separate Scottish legal system was not properly accounted for by the Westminster draftsman.

But the review is also an opportunity for the operators to be heard as after all they are an extremely valuable part of this country’s economy and tourism. This review should not be used as an excuse to re-air the moral arguments of those who see gambling as a vice. It is undeniable that for some people, gambling is not an appropriate pastime. But it is also a huge contributor to the leisure time and enjoyment of many people, and the modern gambling premises is a responsible, safe and regulated business. There is no other leisure activity that must comply with the level of conditions and regulations as in a gambling premises, and whilst that is for good reason, if operators do comply, then that compliance should be recognised and supported by the Government.

Back to top

The Tobacco Register

The new register for tobacco retailers opened on 1 April 2011. As a result of the Tobacco and Primary Medical Services (Scotland) Act 2010 it will be an offence to sell tobacco products without having your business registered from 1 October 2011. The registration process is dealt with centrally by the Scottish Government, although local authorities have also been given enforcement powers. Key points to note are:

• You will need to register if your business meets the definition of “tobacco business”, which includes any business involving the sale of tobacco products by retail.
  
• The types of businesses to be affected will include supermarkets, convenience stores, local shops, pubs and licensed premises which sell cigarettes from behind the bar, and specialist tobacconists.
  
• “Tobacco Products” includes cigarettes, cigars and tobacco but also products associated with smoking such as papers, tubes, filters and even the pipe. If your business sells any of these products you must be registered.
  
• You must be registered no later than 1 October 2011. After that time, unregistered sales of tobacco products will be a criminal offence.

So, to make it clear, if you sell cigarettes or other products as noted, you must register. If you have not registered by 1 October 2011 you will be committing a criminal offence. Here at Lindsays we are advising our clients to get their registration in as soon as possible – do not leave it to the last minute!

If you would like to discuss any issues arising out of the topics mentioned above please contact our experienced and knowledgeable team.

This newsletter has been issued by Lindsays on the basis of publicly available information, internally developed data and other sources. Whilst all reasonable care has been taken to ensure the facts stated and the opinions given are correct, Lindsays does not accept any responsibility for its content and advise that specific advice should be sought regarding the topics covered.
© Lindsays 2012