“A FUNDAMENTAL game changer in licensing regulation terms” – that was the dramatic verdict of Fife pub owner Jeff Ellis, a highly-respected member of the on-trade, when Amazon applied to license its warehouses in Gourock and Dunfermline.
The company already held licences for depots in Glasgow and Edinburgh – but somehow the (successful) applications in Fife and Inverclyde lit the blue touch paper.
At first sight, the “game changer” analysis is difficult to fathom. After all, the online sale of alcohol quickly became commonplace as soon as internet retailing got into its stride.
So, just exactly why has Amazon’s decision to obtain licences for the company’s Scottish warehouses caused such a stir?
Well, according to The Herald, Ellis warned that licensing authorities would be “powerless” to regulate the drinks sales – which would be “on a much bigger and dangerous level than those of supermarkets”.
Willie Rennie, the Scottish Liberal Democrat leader, also pitched in with a call for “evidence from other countries” where this “new model” of alcohol sales “had already been introduced”.
New model? It’s quite astonishing that Rennie appears to be totally unaware that Scots have had the opportunity to purchase alcohol on websites for nearly two decades.
In fact, the potential impact of e-commerce on liquor licensing was considered by the Nicholson Committee 15 years ago with its report recommending that the matter “should be kept under review in the future”.
And, for reasons I’ll explain below, I respectfully disagree with the views expressed by Ellis on regulation.
But, scratch the surface of his “game changer” claim, and a conundrum emerges: the approach of the Licensing (Scotland) Act 2005 to overprovision doesn’t sit comfortably with the licensing of online retailers’ fulfilment warehouses.
When assessing overprovision in any locality for the purpose of its policy statement, a licensing board must have regard to the “number and capacity of licensed premises” in that locality.
Holyrood has always regarded internet sales as a very difficult area.
As a result of changes to the Act some four months ago, the whole of a licensing board’s area can be a “locality”; yet, the recipients of deliveries from a depot are likely to be spread across large parts of Scotland.
Then there’s the matter of “capacity”: since alcohol isn’t displayed for sale at the warehouse the capacity is zero. So, it’s very difficult to see how an overprovision assessment can in any meaningful way take account of premises from which online orders are despatched.
Now, back to the matter of regulation.
Where alcohol orders are despatched from a licensed Scottish distribution centre, the whole of the 2005 Act applies. That brings into play controls which simply don’t apply where alcohol is delivered from south of the border: for example, no so-called “irresponsible promotions”; and, if the legislation finally passes the finishing line, no sales that contravene the Minimum Pricing Act.
The Scottish Government has always regarded internet sales as a very difficult area. The 2005 Act allows Scottish ministers to make regulations governing sales where orders for alcohol are taken in Scotland but the goods are despatched from outwith the country.
The possibility of triggering that power was canvassed four years ago in a major consultation – but no legislation has been forthcoming. As the consultation noted, “there could be considerable difficulties for police and local authorities in seeking to enforce such regulations”.
But, in any case, I reckon it’s pretty unlikely that a business seeking to enter the online market would opt to set up an order-taking system on this side of the border, when it would be altogether easier to avoid regulation under Scots law by taking orders and effecting sales on a “foreign” web server.
Against that background, it comes as no surprise that we’re unlikely to hear more on the subject from Holyrood.
Finally, I’d like to make it clear that the views expressed here relate to online alcohol retailing generally in the wake of the Amazon furore and are not intended to take any position on that company’s Scottish operations.
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