If you want to offer your customers a proper convenience range, that range will include alcohol. However gaining an off licence for a forecourt store is not always easy and rules seem to be changing all the time. For many people, the sale of alcohol on a forecourt is still a contentious issue. Indeed peers in the House of Lords have just dismissed an amendment prohibiting the sale of alcohol in forecourts as part of the Committee stage of the Police Reform and Social Responsibility Bill.
The Association of Convenience Stores contacted the peers involved, setting out the case against the proposal. In the subsequent debate, Baroness Finlay of Llandaff who proposed the amendment, then withdrew it saying there was no evidence of a direct link between alcohol bought on the premises and drink-driving, and added that the sale of alcohol "sometimes makes [forecourts] viable".
Meanwhile, Robert Botkai, head of property and licensing at Winckworth Sherwood Solicitors, says that in England and Wales, the government has announced its intention to reform the licensing laws. The proposals are not yet certain and some are more likely than others to be enacted. The proposals are:
l Licensing authorities will be given the power to prohibit the sale of alcohol between 12 midnight and 6am through ’early morning alcohol restriction orders’.
l They will also be given the power to introduce a levy on those premises (including forecourt stores) that are authorised to sell alcohol between 12 midnight and 6am.
l Licensing Authorities, NHS Primary Care Trusts and local health boards will become responsible authorities so they, like the police, will be able to object to a licence application or call for a review of a licence.
l Licensing Authorities will no longer be restricted to taking such steps as are ’necessary’ to promote the licensing objectives and will instead only be restricted to take such steps as are ’appropriate’.
l The vicinity test, which requires that someone objecting to a premises licence must be from the local ’vicinity’ will be dropped so that anyone, anywhere can object to a licence application.
l The non-payment of the annual fee will lead to the suspension of a premises licence.
l The maximum fine for selling alcohol to someone underage will be doubled to £20,000.
Botkai says any changes will affect every forecourt store that has a premises licence authorising the sale of alcohol or the provision of late-night refreshment.
He adds that the government’s aim is to give licensing authorities and responsible authorities, such as the police, ’greater say in licensing decisions’.
"The proposals have not been thought through properly and have the potential to disproportionately and unfairly impact on licensed forecourt stores," says Botkai. "The proposal relating to early morning alcohol restriction orders is based on the presumption that a late licence equals more disorder. This is not necessarily the case. The proposal to charge a levy on those premises merely ’authorised’ to supply alcohol between 12 midnight and 6am could be disproportionate for forecourt stores as the level of sales will not be taken into account."
He adds that the proposal to make licensing authorities responsible authorities, means that such bodies will, in effect, be acting as ’judge and jury’ in licence applications.
"Many licensing authorities already stretch the definition of ’necessary’. Changing the test to the more ambiguous threshold of ’appropriate’ will only lead to greater legal wrangling," says Botkai.
"I question why a person who does not live or work near to a store should be entitled to object to a licence application. We may find that national lobby groups will be putting in objections to applications all over the country.
"I predict that if these proposals are enacted there will be an increase in numbers of applications refused. This will result in more appeals and therefore increased costs." The proposals are still working their way through Parliament. It is expected that the proposals that do survive the legal process will come into effect from early 2012.
Meanwhile, separate from the government’s proposals, a recent High Court decision has caused some confusion about the process for applying for a licence for a forecourt store and the stage at which the primary use of the premises becomes relevant.
Botkai says: "I continue to argue successfully that the primary use is not normally relevant during the course of an application but this is a complex area and I am happy to advise readers who may wish to contact me."
Forecourt Trader readers can register for Botkai’s licensing news updates at http://www.wslaw.co.uk/sign-up/
According to Jack Cummins, one of Scotland’s leading licensing lawyers with over 30 years’ experience in licensed retail, Scotland’s forecourt operators have been "in the eye of a legal storm" as the country has moved over to a new licensing system.
"The Licensing (Scotland) Act 2005 denied licensed filling station shops a guaranteed right to continue alcohol sales when the legislation went fully ’live’ on September 1, 2009. Instead, the Act placed a ban on the issue of premises licences unless applicants satisfied a complicated test.
"They had to prove an ’exemption’ by demonstrating that ’persons resident in the locality’ are, or are likely to become, reliant on the premises ’to a significant extent’ on the premises as the ’principal source’ of motor fuels and/or groceries," explains Cummins.
"It seems that the purpose of the new provisions was to break the association between drinking and driving but at the same time protect communities where the premises are the only source of petrol, derv or grocery facilities for miles around. While some licensing boards took a light touch in applying the new Act, a number principally Glasgow, Edinburgh and Falkirk effectively took the view that the test for exemption was almost impossible to satisfy in urban locations. A number of legal challenges followed.
"In April of this year BP secured a landmark appeal victory. The company had been refused licences for BP/M&S Simply Food operations in Edinburgh and Glasgow. Scotland’s highest civil Court the Court of Session ruled that the relevant part of the Act had not been in place when three of the four applications had been rejected. More importantly, the senior judges who said that the legislation was ’unquestionably difficult’ clarified the correct approach to the exemption test."
These are the key points:
A ’recognisable’ number of persons resident in the locality was required and more than a mere handful.
Those persons had to treat the forecourt premises as the ’principal source’ from which they obtain groceries and/or motor fuels. If the facilities were not available they would properly consider themselves ’materially disadvantaged or inconvenienced’.
The fact that alternative facilities might be available in the locality can be taken into consideration but that factor alone does not settle the issue.
Cummings continues: "It remains to be seen how licensing boards will approach applications in the wake of this judgment. The consensus view is that it ought to make the exemption test easier to satisfy but only time will tell."
The Licensing (Northern Ireland) Order 1996 prohibits the sale of intoxicating liquor in premises situated on a service area and premises in which the principal business carried on is the business of a garage. Samuel R Beckett, partner at McGrigors Belfast LLP, says: "Over the years there has been a lack of clarity in the decisions concerning applications for liquor licences at garages.
"This has ranged from the refusal of an application where the proposed off licence was inside the garage shop, through to positive decisions providing that there should be no direct connection between the off licence and the garage shop, and the imposition of a condition that a screening wall should be erected. There have also been decisions where the Court was satisfied that the principal business was not that of a garage and so granted a licence for an off licence within the garage shop."
It seems then that many licensing decisions are down to interpretation of the law, making applications a tricky process and meaning retailers should seek expert advice.
Susie Hawkins, Simon Smith Group:
"Five out of our seven sites sell alcohol and it’s a very important part of their shop offer. The range varies on the location our biggest stores have 3m of red wine, 3m of white wine and 5m of beer plus a promotional unit. Our smaller stores may only have 4m in total.
"Our best sellers at the moment are Lindemans wines (on promotion); Marques De Grinon Rioja Tempranillo (on promotion); Stella 500ml; Strongbow 568ml and 2ltr (on promotion). In the big stores all white wine and beer is chilled. In the smaller stores we have less capacity to chill everything but chill as much as we can. Promotions are important about 60-70% of our sales come from promotions but it is a careful balance between promotional activity and the margin on that activity, otherwise the category margin can suddenly drop. We are relatively competitive but when the supermarkets do the very deep cut promotions (three for £18 multipacks) we struggle.
"Some of our off licences we have had for years. The only licence we have applied for since the new legislation was in 2009 following redevelopment of a site to Budgens. This was relatively easy because of the redevelopment. I haven’t even tried to get licences on the other two sites they are much smaller and due for redevelopment. It is only when we redevelop that we will apply for one.
"Saying having an off licence on a forecourt encourages drink/driving is absolute rubbish. Most of my stores are c-stores that sell fuel and therefore it is an expected part of our offer. People generally drive to the supermarket and you don’t hear people saying that supermarkets selling alcohol encourages drinking and driving."
RTD brand WKD goes Purple
Debs Carter, marketing director for Beverage Brands, says the big news in RTDs (ready-to-drinks) this summer is the arrival of the WKD Purple Limited Edition.
The first-ever limited edition for WKD, Purple is backed by a £3m marketing campaign which forms part of a £30m spend on the parent brand this year. Activity includes TV advertising, a poster campaign, extensive sampling and heavyweight digital support.
"We’re giving forecourts the opportunity to bring the launch of WKD Purple to life by providing free point-of-sale kits, which include A3 versions of the poster ads, via our POS Hotline (0800 917 3450)," says Carter, who adds that cash and carries and wholesalers are offering tailor-made promotions to encourage retailers to trial WKD Purple. According to Nielsen data, WKD now accounts for over 39% of all RTD volume sales in the impulse sector, making it over double the size of its nearest competitor.