News Joint schemes gain strength

Dealing with high strength alcohol

Over the last few years a number of Licensing Authorities across the UK have engaged with operators assessing whether schemes can be introduced that are aimed at reducing the consumption of high-strength alcohol.  Proposals have taken various forms with operators often being encouraged to withdraw high strength products from sale in an attempt to combat alcohol related public health and safety issues. 

Reduce the Strength Campaigns gained in popularity following the much publicised and perceived success of the campaign set up in Ipswich in 2012, which encouraged participating off-licensed premises to remove “Super Strength” (above 6.5%) alcohol from their shelves.  The scheme aimed to prevent “excesses of street drinking, making a better environment for the public and business and help vulnerable alcoholics”.  Ipswich effectively signed up two thirds of the town’s shops to the project.

We have seen many debates over the years regarding the potential successes of such schemes although the general consensus is that any proposals must be tailored to address specific issues and that a one size fits all approach may not be appropriate.

Where schemes are developed care must be taken to ensure proposals are not anti-competitive and the Competitions & Markets Authority (CMA) has issued detailed guidance in this regard, which is available from the gov.uk website.

The main factor to consider for both operators and local authorities alike is the potential breach of the Competition Act 1998.

The Act prohibits any agreements between economic entities, which includes retailers and suppliers that either aim to or effect the prevention, restriction or distortion of competition. 

Most importantly the restriction applies to agreements that either fix prices or trading conditions and the direct or indirect sharing of commercially sensitive information.  Whether or not agreements are approved by local government or any discussions take place in the presence of Government officials does not prevent proposals from falling foul of competition law.

Local Authority initiatives may be developed to tackle abuse of high strength alcohol and schemes may be set up to deliver public policy objectives.  Businesses may also work together with Authorities to address legitimate concerns and there is no prohibition in that regard.  However, any proposals must be engineered so that competition between products is not restricted. 

The CMA has advised that in circumstances where local authorities convene meetings with local operators, discussions should not encourage or pressurise retailers to participate in behaviour which could be considered anti-competitive.

A number of Authorities have introduced similar campaigns such as Islington where over 65 percent of shops and off licences in targeted “hotspot” areas volunteered to stop selling cheap super strength products.  Islington focused the scheme on those areas where anti-social drinking had been reported as a problem.

Portsmouth’s reducing the strength campaign also saw over 100 off licences removing beer and cider from their shelves containing over 6.5% alcohol.  In the 12 months between October 2013 and October 2014 the Council reported a 39% reduction in street drinkers and 43% drop in associated incidents.

Such initiatives, if implemented correctly and developed with operators, can clearly be used to address local problems that may be associated with alcohol consumption.  

Although it appears, for now at least, that there will not be a public health licensing objective, the Local Government Association has provided guidance for public health teams to engage as effective consultees both in their capacity as a Responsible Authority but also in the development of local policy.  As public health bodies continue to become more involved in licensing the question has to be asked whether further schemes may be developed that target both the on and off-trade?

Whether or not local authority initiatives risk infringement of competition law will depend upon the nature and substance of any proposals and self-assessment should be completed on a case-by-case basis.   

The renewed stance by the CMA appears in accordance with last years’ decision of the European Court of Justice regarding Scotland’s proposed minimum unit pricing.  The Court considered that “the effect of the Scottish legislation is to significantly restrict the market”.  The Court did however confirm that the matter was open for the Scottish Courts to decide whether alternative measures were adequate to meet the objective of “protecting human life and health”.

Developing alcohol policies appears to be a hot topic at the moment, particularly considering the recently revised government consumption guidelines.   This area of law is clearly fraught with potential risks and any proposals must be carefully considered.