Bottle shops are increasingly integral to brewers' growth strategies. But in order to bring your ideas to market, you need to navigate a number of challenges – principal among which is getting the required licence.
Whether it's a couple of shelves at the end of a brewery tour, a larger point of sale within a brew-pub or a standalone unit away from the brewery, there are a number of factors to consider that may impact on your ability to set up an off-licence facility.
Sales for consumption away from the premises are classed as off-sales. This is in contrast with a licence for on-sales for consumption on the premises. Seems simple? Unfortunately there are technical arguments around the fringes about what is an on- or off-sale.
A simple rule of thumb is that if you're selling alcohol in a sealed container (usually a can or a bottle) to be taken away from the premises and drunk later, that's an off-sale. If you're selling something in an open container for immediate consumption, that will be an on-sale. This article focuses on off-sales, irrespective of whether this occurs in the brewery, a pub, a shop or an off-licence and for simplicity, I will refer to them as bottle shops.
As we have established, a premises licence for off-sales will be required for a bottle shop. Some bottle shops now sell 'fresh' beer from the tap in bottles that can be stoppered (sealed). This is still an off-sale for the reasons described above. Allowing customers a 'taster' of beers prior to choosing their purchase is not a sale, it is a sample of the product and you do not need to have on-licence facilities to provide this.
Each licensing authority is bound by law to publish a licensing policy. This explains what the council expects of new applications and may include reference to:
• A cumulative impact policy
• An hours policy
The first thing to note is that nothing in a policy is absolute. Every application must be considered on its merits. However, let's look at some of the problems these licensing policies can throw up:
There are approximately 220 cumulative impact policies in effect in England & Wales at the moment. Most relate to larger towns and cities and cover specific geographical areas containing large number of bars and clubs grouped together. The reality therefore is that many brewers will not be applying within a designated cumulative impact zone (CIZ). However, if you are, this can have a significant impact on whether or not your application is likely to face opposition.
A CIZ allows an authority to designate areas where the sheer number of licensed premises has itself become a problem and the 'cumulative impact' needs to be considered when reviewing a new premises licence application. The council can decide if its policy only affects a certain type of premises – such as pubs and bars or off-licences – or simply lump all licensed premises into the mix.
Within a CIZ, the burden of proof is on the applicant to demonstrate that the application will not add to the cumulative impact experienced in the area. Often, CIZs are intended to catch late night sellers of 'booze' and are less likely to prevent a small bottle shop, brewery or brew-pub from selling a few bottles for customers to take home.
Differentiating your operation from your average 'offie' is key to avoiding a rejection based on a cumulative impact policy. A bottle shop selling only local beers, likely to appeal to a discerning crowd and priced so that street drinkers and 'pre-loaders' are not your likely customers, stands a much greater chance than an application to sell cheap booze at a discount.
Licensing policies will often suggest the latest times for different types of premises that applicants should consider applying for. Later hours will almost certainly lead to a more difficult application process with objections from the council or police. However, this should not prevent you from applying for the hours you want to trade if you think you can justify this.
Some councils have made it part of their policy to impose a condition limiting the strength of alcohol that can be sold in off-licences, often in the 5.5 ABV+ region. Likewise, some police and trading standards officers will request something similar in relation to new licence applications. Brewers – especially brewers of double and triple IPAs – need to carefully consider whether they can comply with such a condition. If it's going to be a problem, the condition needs to be resisted at the outset rather than being agreed to with a view to seeking to change it later.
While challenging the condition might bring pain in the short-term, the reality is that this type of condition represents an outdated means of seeking to prevent street drinkers buying high volumes of alcohol at a low price. To limit the maximum ABV of all products is clearly a disproportionate response to the problem. I do not recall ever seeing empty bottles of Trappistes Rochehfort 10 (weighing in at 11.3 ABV) dotted around my local park. Any condition should be targeted to the harm it is intending to address and go no further. For brewers, especially those producing small batch, high ABV specialist beers, such a condition can be devastating.
The Portman Group, the responsibility body for drinks producers in the UK, is consulting on beefing up its 'immoderate consumption' rules for drinks. Its proposal would see immoderate consumption being defined as four units of alcohol per non-resealable container. While responsible consumption is a vital issue, the same considerations about proportionality will also need to be borne in mind.
Early engagement with the police and licensing authority, alongside providing a good overview of your proposal, will often smooth the way for your application. Conditions can be agreed, or the reasons why they do not work can be explained, meaning problems are ironed out before you even begin your application. Remember, if no one objects to your application, it is granted without a hearing, irrespective of any CIZ.
• The council's licensing policy will identify likely issues such as cumulative impact zones, hours policies and preferred conditions.
• Pre-application consultation with police, the licensing board and trading standards is essential for the best results.
• Don't be put off by cumulative impact zones. They are not usually there to prevent all applications, just more of the same. Offer something new.
• Agreeing conditions you cannot actually live with 'for an easy time' at the start and hoping to challenge them later is likely to backfire in the long run.
• Conditions limiting high ABV beers are likely to be disproportionate if they prevent you from selling niche 'craft' products at high prices.
This article was first published in the July/August 2018 issue of The Brewers Journal. You can download the digital magazine here.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at July 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.