How will the trade comply with MUP? | Scottish Licensed Trade News

Scottish Licensed Trade News

How will the trade comply with MUP?

Posted on by in Legal

The devil’s in the details in terms of enforcement and compliance

Bottles-on-supermarket-shelves

It remains to be seen how minimum pricing will be enforced in Scotland.

OVER the next few weeks, in the run up to the implementation of minimum unit pricing (MUP) on May 1, we can expect to see a large-scale awareness-raising campaign.

At the time of writing this column, a new Scottish Government website – minimumunitpricing.scot – was expected to go live on March 9.

The site’s intended to help retailers put compliance preparations in place; and I expect it will also offer help on a number of possible areas of difficulty.

It’s likely to be based to some extent on the guidance issued by the Home Office when measures were introduced in England and Wales to stop the below-cost sale of alcohol. In that case, there ought to be some steer on issues such as the impact on staff discounts, meal deals and the use of reward cards for alcohol purchases.

It’s vitally important that the trade gets to grips with its obligations. Because MUP will become a mandatory condition of premises (and occasional) licences, it creates the potential for a top-level ‘Section 1’ offence, carrying a maximum penalty of £20,000 and the risk of imprisonment for up to six months.

If a product is sold below the minimum price, the offence is committed by the person carrying out the sale, raising the prospect that a checkout operator (say) may end up in court.

The more likely outcome is a prosecution against the licence holder under the Licensing (Scotland) Act’s scheme of “vicarious liability”. Where an offence is committed by the licence holder’s employee or agent, the licence holder is liable to be convicted – unless it can be shown that “all due diligence” was exercised.

While personal licence holders must refresh their training every five years, there’s no legal obligation to update the mandatory two-hour training for staff selling or serving alcohol. But when it comes to due diligence it would be a wise move – and will have an added benefit of helping frontline staff explain MUP to irate customers.

It’s not yet clear how enforcement will operate, but I’d expect it to be placed in the hands of licensing standards officers, who could take a proactive approach or simply follow up reports of MUP breaches.

Given MUP’s high profile, the former course is far more likely. And, of course, while a prosecution might not follow if non-compliance is detected, the licence holder could well face a review hearing.

In previous legal columns, I’ve looked at some of the so-called “unintended consequences” of MUP – something of a misnomer since they’ve been entirely foreseeable: for example, the likely growth in an alcohol black market, an over-the-border white van booze cruise boom and a surge in internet sales.

An alcohol charity has also floated the possibility that MUP will be a cash cow for shops and supermarkets.

Leaving aside the argument that such a result might have been avoided by using taxation as a tool to suppress sales rather than MUP, this takes us into an interesting area.

If price hikes have the intended effect, then the books might simply balance – more or less.

But if customers are in the main prepared to absorb the extra expenditure on their regular drinks shopping, convenience stores purchasing from wholesalers operating in a way that allows them to avoid trade sales at the minimum price could see a cash bonanza – and find themselves close to a level playing field with multiple retailers.

It just remains to be seen how producers and wholesalers will react to the new regime.

On the other hand, it’s also conceivable that off-sales outlets taking a pessimistic view of the effect on their alcohol sales on revenue will try to mitigate the damage by bundling alcohol with the free extras.

Those contemplating such a course would of course be well advised to ensure they stay legal by taking expert advice on whatever promotion they have in mind.

Jack Cummins is one of Scotland’s leading licensing lawyers. Every month he writes on licensing law and answers readers’ questions in SLTN.

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Jack Cummins is unable to enter into personal correspondence on readers’ questions. The advice offered in SLTN is published for information only. No responsibility for loss occasioned by persons acting or refraining from action as a result of material contained in SLTN can be accepted by the author or publisher.

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