The Court of Appeal has recently considered the provisions in the Sale and Supply of Alcohol Act 2012 which require the display of alcohol within a “single area” in supermarkets. Since the Act came into force in 2013, supermarket operators, reporting agencies, the District Licensing Committees (DLC) and the Alcohol Regulatory and Licensing Authority (ARLA) have all grappled with what this requirement means in practice.
Single area for alcohol display
Sections 112-113 of the Act require a District Licensing Committee to impose a licence condition on off-licences relating to supermarkets or grocery stores describing a single area where alcohol can be displayed, promoted or advertised. This area cannot be located between the main body of the premises and the store entrance, or between the main body of the premises and the general point of sale. That is, it cannot be located within an area that shoppers unavoidably pass through.
Section 112(1) states that the purpose of the single area for alcohol display is “to limit (so far as is reasonably practicable) the exposure of shoppers in supermarkets and grocery stores to displays and promotions of alcohol”. Section 113 of the Act requires decision-makers to “have regard to” this purpose when describing, or forming an opinion regarding, a single area for alcohol display.
Background
The case of J & C Vaudrey v Canterbury Medical Officer of Health[1] concerned two applications for off-licences in respect of New World supermarkets in Christchurch. In both cases, the applicants proposed a single area for alcohol display, and the Christchurch DLC granted the off-licences subject to significantly modified single areas for alcohol display. Both decisions were appealed to ARLA on natural justice grounds, as the applicants had not had an opportunity to be heard regarding the new single areas for alcohol display. ARLA allowed the appeals on natural justice grounds, but found that the DLC’s role was simply to grant or decline the application based on the proposed single area for alcohol display, rather than modifying the area.
On appeal, the High Court found that the decision-maker had to make an evaluative assessment about the single alcohol area proposed, and could propose amendments to the single area or any further conditions not inconsistent with the Act, provided the applicant had an opportunity to be heard. The High Court did not necessarily consider that the applicant needed to be afforded an additional opportunity to be heard following any proposed amendments by the decision-maker.
The Court of appeal
Decision-maker’s role in describing a single area for alcohol display
The Court of Appeal dismissed the appeals, and largely upheld the High Court’s judgment. It found that whilst the decision-maker cannot unilaterally describe a single area beyond the perimeter of the area proposed by an applicant, it is not fettered by the applicant’s proposal. Rather, if the decision-maker does not accept the single area proposed by the applicant, it can either decline the application, or indicate to the applicant that it would be minded to grant the application if a revised plan was submitted incorporating a single area acceptable to the decision-maker. If the decision-maker’s preferred alternative single area is not acceptable to the applicant, the decision-maker is then obliged to decline the application.
Purpose of single alcohol area
In describing or considering a single area for alcohol display, the decision-maker must “have regard to” the purpose in s.112(1). The Court of Appeal found this is not an absolute requirement that the decision-maker be satisfied the single area for alcohol display limits, so far as is reasonably practicable, the exposure of shoppers to alcohol. Rather, “have regard to” is a lower threshold, requiring a decision-maker to give genuine attention and thought to the purpose in s.112(1). The Court of Appeal held that if, having regard to s.112(1), a decision maker considers the proposed single area incompatible to that purpose, then it is entitled to take this into account in its decision to approve, decline or propose an amendment to the single area proposed in the application.
Comment
We consider that a sensible compromise on describing single alcohol areas has been reached, in that the decision-maker cannot dictate a single area for alcohol display, but the applicant does not have the final say, either. This should encourage applicants to thoroughly address the single area in their applications and in hearings, and engage collaboratively with decision-makers.
In our view, the reporting agencies in some cases have mistakenly considered the s.112(1) purpose as an absolute prohibition on the visibility of alcohol outside of the single alcohol area. As to this, the High Court noted that “so far as reasonably practicable” is a narrower term than “physically possible” and includes an element of proportionality between the desired objective and the sacrifices required to achieve it. The Court of Appeal built on this, helpfully confirming that the requirement to “have regard to” the purpose in s.112(1) does not go so far as to “give effect to” it. Rather, a decision-maker is simply obliged to give serious thought and attention to the purpose of limiting exposure of shoppers to alcohol. Hopefully this guidance will assist reporting agencies as they assess applications against the Act.
Of course, the decision does not provide the desired answers about precisely what types of alcohol display arrangements will be considered appropriate. For example, it remains unclear to what extent the visibility of alcohol from outside the single area must be limited, and whether screening, end-of-aisle displays or top shelf displays are appropriate. These answers will only be revealed as the Court of Appeal decision is applied to individual circumstances over time, and a body of law develops. We anticipate that as this occurs, general principles around single areas for alcohol display will emerge, providing much-needed certainty to both reporting agencies and applicants.
Please contact Jason Welsh for further information, or alcohol licensing advice.
[1] [2016] NZCA 539.