Most new entrants to wine & spirits e-commerce in the UK assume they will need a whole raft of licences in order to start selling alcohol online. The requirements are actually quite relaxed in most cases.
The Licensing Act 20031 requires premises at which the retail sale of alcohol takes place to have a premises licence. Where does a sale take place? In most face-to-face sale scenarios the answer is obvious. But what about where a contract is made online or by some other distance sale2 method?
The answer depends on where the alcohol is “appropriated to the contract”. The Act provides that where a contract for the sale of alcohol is made at one place and the alcohol is appropriated to the contract at a different place, the sale is treated as taking place at the latter. In the case of online sales, the sale contract is made by the customer confirming the order and authorising payment. Wherever that contract is made, or deemed to be made, the alcohol will usually be stored at a warehouse, from where it is selected, packed and dispatched to the buyer. Because the warehouse is the place where specific goods are allocated (“appropriated”) to the contract, the warehouse must have a premises licence. The online seller does not need one in this scenario.
Alcohol can only be sold by retail if:
(a) a Designated Premises Supervisor (DPS) has been appointed for the relevant premises; and
(b) the DPS holds a personal licence, and the sale is made or authorised by the DPS or another personal licence holder.
For an online sale, therefore, the warehouse must have a DPS and the appropriation of alcohol to the contract must be made or authorised by a personal licence holder. Again, the online seller needs no such licence in the above scenario.
At the point of sale
It is a criminal offence to sell alcohol to an individual aged under 18. It is a defence to show that all reasonable steps were taken to verify the person’s age. Online sellers should therefore put adequate age verification measures in place. But no licence as such is required.
Premises licence holders must operate an age verification policy, which must require individuals who appear to be under 18 years of age to produce photographic identification and proof of age before being served alcohol. According to the current Home Office Guidance under the Act, alcohol sold remotely is “served” when it is delivered to the customer, so it is the responsibility of the premises licence holder to ensure that age verification takes place before delivery where required. This suggests that in our online sale scenario the warehouse cannot rely on online seller’s verification process, and must itself take steps to ensure that delivery drivers carry out age verification.
The legal basis for this seems dubious, and at odds with the fact that the Act permits alcohol to be delivered to an under 18 if delivery is made to the (adult) buyer’s home or place of work. It would be interesting to know how often, if ever, age verification on delivery actually occurs in practice.
Online sellers will not need a premises licence or a personal licence unless they operate the premises at which alcohol is appropriated to sale contracts.
- take all reasonable steps to ensure that alcohol is not sold to anyone under 18
- ensure that any warehouse or other place at which products are stored and selected for delivery to customers has the necessary licences and compliance procedures in place.
For more detail see the excellent and very comprehensive UK Government Guidance.
Although I come across premises licensing to some extent in my wine & spirits trade practice, I am not a licensing expert. If you need licensing law advice I suggest you contact law firm specialising in licensing work.
Except where otherwise stated, all information given and any legal opinions expressed on this website assume that English law applies. See Conditions of use.
1 Covers England and Wales: Scotland and Northern Ireland have their own licensing regimes, which differ in some ways.
2 Distance sales are sales to consumers which are concluded online or by mail order, phone, email or fax, i.e. where the seller and consumer are not physically together at the seller’s business premises.