Daily Archives: 24/06/2015

Landmark case as council sued over Reduce the Strength Scheme

This was featured in April’s Institute of Alcohol Studies and looked at a landmark case where the council was successfully sued over lost revenue after complying with the Reduce the Strength Scheme with a sub header that it could open the floodgates as the case may set legal precedence.

reducing the strength

Here’s the coverage:

Retailers could be entitled to compensation from councils that illegally enforce bans on certain products following a landmark case where loss of earnings put a store on the brink of closure.

According to Off Licence News, Shabir Mohammed, owner of Lifestyle Express in Newcastle, pursued his local authority in the courts for a loss of revenue amounting to £280,000 when he was banned from selling beers and ciders above 5.6% ABV.

The retailer was also forced to remove certain wine brands from his shelves as part of the council’s Reducing the Strength scheme. The measure was added as a condition to his licence in May 2014 and when the licensing committee refused to remove it later that year, he launched a successful legal appeal.

The senior magistrate who ruled in favour of Mr Mohammed criticised the local authority’s actions for imposing a condition despite a lack of “direct evidence that the premises was undermining licensing objectives”. Legal experts have warned the case could open the floodgates to a tide of similar cases from retailers who believe they have been strong-armed into joining Reducing the Strength schemes, and councils could be liable for significant compensation claims.

Jane Gilliead, the licensing consultant representing Mohammed, told OLN: “It is a huge concern that licensing authorities are adopting such verbal schemes, without there being any consultation with the trade. We are now looking at the possibilities for recouping some of the lost earnings and he is fully intending to pursue this.

“Ultimately my client could have gone out of business, such were the considerable losses and the time it has take to overturn this illegally applied measure.

“Retailers have been reluctant to challenge such schemes for fear of reprisals, so it is a vital step forward for those who are subjected to these schemes.”

As reported in last month’s Alcohol Alert, guidelines issued by the Competition & Markets Authority to retailers concerned they could be participating in an illegal scheme, stated clearly that retailers could participate in competition law-compliant voluntary schemes so long as they avoided discussions with competitors.

Here’s what bothers me about this and hence why I’m discussing it:

The retailer suffered a loss of revenue amounting to £280,000 when he was banned from selling beers and ciders above 5.6% ABV when the measure was added as a condition to his licence in May 2014.

So in less than a year this retailer was making almost quarter of a million pounds on high strength beers and ciders.  I find this astounding and horrifying in equal measure.  Yes he has to make a living, I am not anti-business, but once again this case shows that business needs have been placed above public health concerns.

Not only that but in other council areas this initiative has also helped reduce crime rates so it will do a u-turn on law and order too:

A campaign launched to prevent the sale of super strength alcohol in Ipswich has seen a 50 per cent fall in offending by street drinkers in the town, it emerged today.

And what is even more concerning is you can bet the drinks industry are following this and will be considering ways to reach out to similar retailers to support them in their legal challenges if this indeed sets legal precedence.

We are going bloody backwards on this issue – not forwards …….