Bullets and Booze

An analysis of the main effects of the recently-introduced Air Weapons and Licensing (Scotland) Act 2015 on the country’s convenience retail sector.

By: Audrey Junner

You could easily be forgiven for wondering what exactly bullets have to do with the retail of booze. The answer is: very little.

Audrey Junner is a partner in Miller Samuel Hill Brown, heading up the firm’s licensing department.

The first part of the Air Weapons and Licensing (Scotland) Act 2015 (AWLA) introduced a new Air Weapons Licensing regime to Scotland.
However, it is the second, less known part of this legislation, due to come into full effect later this year, which could have a significant impact on retailers. This includes their ability to obtain a licence; some provisions will cast doubt on retailers’ abilities to continue to hold licences; while others may actually affect the value of existing licences. You have to look past the title of this act to get to the detail.

Fit and Proper

For those readers who are veterans of the trade, the ‘fit and proper’ test will be all too familiar. The Licensing (Scotland) Act 1976 used ‘fit and proper’ as the basis for determining licensee eligibility and there is case law stretching back years which highlights the challenges which the test created.
This came to an end in 2009 when the new 2005 Licensing Act was commenced. At that time, the Scottish Minister in charge of licensing considered that the test involved a “moral judgment” that was no longer appropriate. Very quickly the Government sought to revert to the previous position, with former Justice Minister Kenny MacAskill stating that he would do all in his power to bring back the test: its removal was, he said, “a mistake”.
Some nine years later that statement has come to fruition as the AWLA sees the return of ‘fit and proper’. It’s a move which has generally been welcomed by many, including Police Scotland, many licensing agents and also respected members of the trade passionate about protecting the credibility of their sector.

Scope to object

There is no question that a test which prevents undesirable entrants to the licensing arena should be viewed positively, but there continues to be some apprehension about the actual application of the test in practice. The drafting in the act is wide and ‘fit and proper’ is undefined. The fear is that this creates massive scope for Police Scotland to object on any terms.
Practically, those seeking to obtain a licence, whether by new application or transfer will be subject to more rigorous checks and Police Scotland may seek to bring forward accusations and spent convictions. Those practising Licensing Law will be all too aware of the differing approaches currently taken across the country by Police Scotland and also licensing boards, leading to a lack of uniformity in objecting to and determining applications.
There are concerns that this will be accentuated by the return of the test.

‘Other factors’

The AWLA also alters the position on over-provision by clarifying that a licensing board has within its power the ability to determine its entire area as over-provided and also allows licensed hours to be taken into account as a factor in establishing the over-provision ground of refusal.
It has long been accepted that there is no duty to trade so this change is not expected to have any great impact.
There is, however, a real over-provision game changer hidden in the AWLA which hands licensing boards sweeping new powers to refuse licences and variations of existing licences.
Over-provision was once a numbers exercise, but following criticism this was altered to a more focused approach in the 2005 Act which required boards to make a proper assessment by looking at the number and capacity of premises or premises of the same or similar description.  The AWLA alters this approach, creating an all-encompassing ground for refusal which allows the board to consider ‘other factors’.
In practice this could create a major obstacle for many licence applications, ultimately making new licences more difficult to obtain and consequently increasing the value of existing licences. Potential new entrants to the market should be very cautious when purchasing premises.

A long wait

Finally, there are some procedural changes being introduced by the AWLA including the creation of a nine month deadline for the processing and determination of new licence applications which, although welcome, is criticised for being too generous and lacking in commercial awareness.
Nine months is a very long time for operators to wait to launch new ventures.
There are also much sought after changes proposed to the heavily-criticised licence transfer provisions in the 2005 Act. My advice is that to ensure the future of a licence you must hold it, particularly if you are a landlord and there is potential for a tenant to abandon your property.

An interesting year

Current indications are that the AWLA changes will be brought into effect around the spring of this year. With local government elections taking place in May we are expecting to see a very different licensing landscape with dramatic changes to the constitution of licensing boards.
It seems that 2017 is set to be an interesting year for the trade with both new councillors and new legislation bedding in. We can only hope that the new over-provision rules are not used as a silver bullet to inhibit growth within the off-sales sector and have confidence that the new boards will use their enhanced ammunition with care.