What licence do you need to deliver alcohol?
“What licence do you need to deliver alcohol?” is a question that may be of sudden and urgent interest to many operators.
The answer is of course a Licensing Act 2003 premises licence, which authorises premises to be used for the licensable activity of the sale of alcohol by retail, and which doesn’t contain any relevant restrictive conditions.
The premises licence will relate to a particular place: probably a convenience store, an off-licence or a pub or restaurant.
The premises licence must authorise the supply of alcohol for consumption off (or on and off) the premises. You can check this in a box on the second page of the licence.
Finally, there shouldn’t be any conditions that impose restrictions on deliveries. It is unusual for this to be the case.
To stay keep within the law, the alcohol sold has to be “appropriated to the contract” on the premises.
Why? Because s.190 of the 2003 Act provides:
(1) This section applies where the place where a contract for the sale of alcohol is made is different from the place where the alcohol is appropriated to the contract.
(2) For the purposes of this Act the sale of alcohol is to be treated as taking place where the alcohol is appropriated to the contract.
Your customers seeking deliveries are not likely to be on the premises; instead they will be at or on their way to their homes, the place of deliveries. The place where the contract is made might be at the premises - but it might be where the customer is, or on the internet or “in the cloud:”.
So the relevant place is where the alcohol is appropriated to the contract. If this place is within the licensed premises then the sale is lawful.
The ambit of the licensed premises is straightforward to establish. You can find this out from the licensing plan, part of the premises licence. There should be a red line (or often, a black and white photocopy of a red line) that delineates the licensed premises. This is your lawful zone. All your appropriation has to be done in this zone.
What is “appropriation to the contract?”. It is actually quite a technical concept: for those who are interested, I set it out at the foot of the article. For those who need to get on with delivering alcohol, and couldn’t care less about the technical background, for pretty much any order of alcohol to be delivered, appropriation takes place when the particular bottles or cans are selected for the customer in question. So, to be legal, the order has to be bagged or boxed up or otherwise labelled for the customer within the licensed premises.
It is not ok to fill a van up from the premises with the aggregate of what has been ordered and satisfy orders by selecting cans and bottles from a mass in the van: in that scenario, the appropriation to the contract is happening in the van, not in the premises.
Nor is ok to simply send the van out full of product and drive around taking and satisfying orders on an ad-hoc basis: for that you would need to licence the van.
But if the product is bagged up on the premises, that is lawful
Once the alcohol is appropriated, it can then be delivered. The delivery and handing over (in legal terms, “supply”) of the alcohol is not the licensable activity.
As long as you stick to that procedure (which you can demonstrate by doing it under the gaze of your ever-recording CCTV, with records of orders and receipts), you are lawful.
What of the s.182 guidance? It provides:
Mobile, remote, internet and other delivery sales
3.8 The sale by retail of alcohol is a licensable activity and may only be carried out in accordance with an authorisation under the 2003 Act. Therefore, a person cannot sell alcohol from a vehicle or moveable structure at a series of different locations (e.g. house to house), unless there is a premises licence in respect of the vehicle or moveable structure at each location at which a sale of alcohol is made in, on or from it.
3.9 The place where the order for alcohol, or payment for it, takes place may not be the same as the place where the alcohol is appropriated to the contract (i.e. the place where it is identified and specifically set apart for delivery to the purchaser). This position can arise when sales are made online, by telephone, or mail order. Section 190 of the 2003 Act provides that the sale of alcohol is to be treated as taking place where the alcohol is appropriated to the contract. It will be the premises at this location which need to be licensed; for example, a call centre receiving orders for alcohol would not need a licence but the warehouse where the alcohol is stored and specifically selected for, and despatched to, the purchaser would need to be licensed. These licensed premises will, as such, be subject to conditions including the times of day during which alcohol may be sold. The premises licence will also be subject to the mandatory licence conditions.
3.10 Persons who run premises providing ‘alcohol delivery services’ should notify the relevant licensing authority that they are operating such a service in their operating schedule. This ensures that the licensing authority can properly consider what conditions are appropriate. Premises with an existing premises licence, which choose to operate such a service in addition to their existing licensable activities, should contact their licensing authority for its view on whether this form of alcohol sale is already permitted or whether an application to vary the licence will be required.
Paragraph 3.10 is guidance: no more. There is no obligation on an existing premises licence holder who wishes to add a delivery service to consult with the licensing authority. And although every case must be judged on its merits, it seems hard to understand how there could be any criticism of a premises who, to assist the physical distancing required by the current public health crisis, resolved to offer to satisfy orders by delivery as an alternative to customers coming into stores, provided it did so responsibly.
For those interested technicalities of "appropriation to the contract":
The relevant licensable activity is the sale by retail of alcohol: s.1(1)(a) of the Act.
“Sale by retail” is defined in s.192 of the 2003 Act and, subject to irrelevant exceptions, means “a sale of alcohol to any person”.
The Act does not define “sale”.
Assistance can be found in the Sale of Goods Act 1979 (“the 1979 Act”). S.2(1) defines a contract for sale of goods as “a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price”.
S.2(4)-(6) then goes on to provide when a sale takes place:
(4) Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale.
(5) Where under a contract of sale the transfer of the property in the goods is to take place at a future time or subject to some condition later to be fulfilled the contract is called an agreement to sell.
(6) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
Thus there is no sale (regardless of whether there is a contract) until the property in the goods is transferred from the seller to the buyer.
By s.16 of the 1979 Act, subject to some exceptions, where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained. This rule is stated in the negative - it does not say that property passes when the goods are ascertained - although in very many instances that is what in fact happens. In contract law, the intention of the contracting parties is of primary importance in determining when property passes and therefore when a sale passes.
Most contracts for the purchase of alcohol for delivery are contracts for the sale of unascertained goods. Gerald Gouriet QC might telephone Justerini & Brooks and order their single listed case of 1955 Château Mouton Rothschild, but for the thirsty licensing solicitors of this world, wearily pinging “buy again” Amazon Prime, the requested slab of Stella Artois will be dragged off a pallet of a thousand twins. Those contracts are for the sale of unascertained goods (see R (on the application of Valpak) v. Environment Agency  Env LR 36 (at ¶33)).
As I have already said, in contract law it is the intention of the parties which is determinative, and s.18 of the 1979 Act incorporates some rules which serve as a presumptions to find out the intention of the parties as to the time at which the property passes. Rule 5(1) is the most pertinent. It provides:
Where there is a contract for the sale of unascertained … goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods then passes to the buyer; and the assent may be express or implied, and may be given either before or after the appropriation is made.
In R (on the application of Valpak) v. Environment Agency Moses J. said:
In relation to the purchase of a bottle of, for example, beer, there is a contract for sale of unascertained goods. When the publican selects the particular bottle from his shelf, he unconditionally appropriates the bottle to the contract and the property and the goods pass to the buyer (see section 18 of the Sale of Goods Act 1979, rule 5…).
The appropriation takes place when and where the order is fulfilled by the goods being selected for the customer in question.Whilst Moses J. was dealing with on-sales, the same logic will apply to offisales.