Irresponsible Promotion; What's Next?

When the 2005 Act was first mooted, some of the main talking points were paragraphs 7 & 8 of Schedule 3 – Pricing of alcohol and Irresponsible drinks promotions. I recall that shortly after it came on to the statute book there were many discussions about what would and would not be permissible. In practice, most licensees have simply gone along with what the local LSO has decreed. In part this is for an easy life, but the realpolitik is that most hard pressed pub, club and hotel owners simply cannot afford the many thousands which an appeal is likely to cost. Even if your friendly licensing expert were to offer a no win no fee service, the prospect of the council’s (with counsel’s) expenses is a very frightening one.

It was therefore welcome to see the first judicial decision on the point, in the case of Mitchells & Butlers Retail Ltd v Dundee City Licensing Board. This was a decision of the Sheriff Principal on 6 December 2010. M & B issued student discount cards in respect of a pub in Dundee. These allowed a fixed discount to card holders. The scheme was not limited by time. The board had taken the view that this constituted a breach of Paragraph 7 of Schedule 3. As we all know, that paragraph prohibits changing the price of alcohol except (a) at the beginning of licensing hours, and (b) no earlier than 72 hours afterwards. The board’s reasoning was that the activity complained of constituted a price variation, in that discount card holders were paying a different price from non card holders. At a review hearing, a written warning was issued.

M & B’s appeal was upheld. Both parties, and the Sheriff Principal, agreed that the wording of the Act was ambiguous. The Court accepted the argument that one should look to the purpose of the legislation, in this case to prevent happy hours and attempt to cut down binge drinking. As the price for discount card holders did not change, the Court held that the Act had not been contravened. In passing, the Sheriff Principal seemed to agree that there was no prohibition on different prices applying in different parts of the same licensed premises, eg a public bar and lounge bar.

It is to be hoped that this common sense approach will spread, particularly in the interpretation of paragraph 8. Far too often LSOs have tried to be the judges of what that involves. In fact, such a promotion is defined in paragraphs 8 (2) and (3), (shortly to be extended by the Criminal Justice and Licensing Act 2010). Thus the offer of a free glass of fizz on Valentine’s Day or Mother’s Day is perfectly legal. Some idiots have tried to argue this is a “reward”. Following the M & B case, you have to look at the purpose of the legislation – to stop night clubs offering booze as prizes for games of doubtful merit and morality. But do be aware of the ways your clients can fall foul of the law. What about hospitality packages involving a free bar? Or your golf club dinner with unlimited wine? Both now struck at. This schedule requires careful reading.