In conjunction with the Health Promotion Agency’s new campaign “Not Beersies” and the establishment of a Ministerial Forum on Alcohol Advertising (which is currently investigating whether further changes to alcohol advertising laws are needed), these changes are a reminder that the legal landscape applying to the sale and supply of alcohol is a changing one. Restrictions on sellers and suppliers of alcoholic products are becoming more significant.
Wine sellers, in anticipating an increase in business during the festive season, should keep in mind their obligations under the Sale and Supply of Alcohol Act 2012 (the Act) – in particular, those restrictions which restrict the ways by which sellers may advertise their products to Christmas shoppers.
It is a timely reminder with the festive season almost upon us that since 18 December 2013, it has been an offence under the Act to promote alcohol irresponsibly. “Irresponsible promotion” is a broad-ranging term, and covers a wide array of promotion types.
One area in which retailers ought to exercise caution is in the advertisement of any special offers relating to alcohol products, particularly outside of licensed premises.
The Act provides it is an offence to undertake any promotion outside of a licensed premise that is likely to make people believe that a discount of 25% or more is available on any alcoholic product. “Outside of a licensed” premise does not merely refer to the physical space outside of a premise – it also encompasses any manner of email, print, broadcast or social media advertising. A number of common advertising mechanisms are restricted by this provision.
It is also an offence outside a licensed premise to undertake any promotion that involves giving away free products or services to customers, upon their purchase of an alcoholic product. This restricts promotions that might award customers free wine glasses or cooler bags upon purchase of a bottle. Inside licensed premises such promotions may occur, provided the offer only relates to the buying of alcohol on those premises.
Within licensed premises, the restrictions are less significant – sellers may advertise discounts of up to 50%, as long as these advertisements cannot be “seen or heard” from outside the premises. However, despite the higher discount threshold, many promotional methods are still restricted. For instance, a “buy one get one free” offer will fall foul of the Act, as will an offer to provide a “free” glass or bottle of wine upon purchase of a meal, for example. The exception to this discount rule is free sampling – sellers may promote or advertise the complimentary sampling of alcohol on premises for which an off-licence is held.
Certain types of promotion are disallowed no matter what the location. Any promotion that is likely to encourage young people to consume to an excessive extent is prohibited. Similarly, promotions where the alcohol must be purchased to enable entry are an offence under the Act.
Sellers should be careful too that they do not fall foul of the more general offences under the Act. It is an offence to do anything that encourages people, or is likely to encourage people, to consume alcohol to an excessive extent.
In a recent decision by the Alcohol Regulatory and Licensing Authority - KR Entertainment Ltd and GS Entertainment Ltd1 - it was noted that this offence might have a wide-ranging impact2 .
In this regard promotions of alcohol encouraging patrons to remain in the private rooms for long periods; the practice of making incentive payments resulting from alcohol sales to staff and contracted workers in the premises; the selling of alcohol by the bottle when smaller measures in glasses will suffice; …are all matters arising from this case that concern the Authority and should concern the reporting agencies. The reality is that under the new 2012 Act licences are not only more difficult to get and to have renewed; they are easier to lose.
As such, sellers and suppliers of alcohol should consider their advertising campaigns cautiously, in the lead up to Christmas. The penalties for “irresponsible promotion” are significant, and can result in fines of up to $10,000 or the loss of a licence for 7 days. A punitive “three strikes” penalty will apply to repeat offenders – licensees or managers who offend against the Act three times within three years are liable to have their licenses cancelled.
Anyone with any queries as to the application of the legislation to a potential promotion or advertising strategy should obtain legal advice.
1An Application by KR Entertainment Ltd and GS Entertainment Ltd [2014] NZARLA PH 167 and 168.
2At [45].
