Despite the Government’s aim of outlawing drinks promotions, a landmark judgment has clarified that discount schemes in Scottish pubs and other licensed premises are permissible.
One of the Mandatory Conditions (that attaches to all Premises Licences in Scotland) prohibits price variations of alcoholic drinks within a 72 hour period, the intention being to outlaw promotions such as happy hours and to prevent binge drinking. This interpretation of this Mandatory Condition has been considered by the Sheriff Principal in Dundee in an appeal brought by a disgruntled Premises Licence holder against a decision made against it by the Dundee City Licensing Board.
The background to the case involves a Dundee pub called the Nether Inn run by Mitchells & Butler which offered a student discount scheme for alcoholic drinks, discounts being given on display of a discount card. The Licensing Board didn’t like this scheme, took the decision to review the Premises Licence and ultimately issued a written warning that the Board considered the discount scheme to be a breach of the Mandatory Condition against the variation of pricing.
Mitchells & Butler appealed the Board’s decision and the Sheriff Principal agreed with their submissions that the Mandatory Condition does not strike at different pricing structures as the Licensing Board had averred, but instead was designed to strike at short term price promotions, like happy hours. The Sheriff Principal was of the opinion that different prices for the same product was not a breach of the Mandatory Condition so long as those set prices were not varied within a 72 hour period. Different prices for different groups of people is therefore not a breach of the Mandatory Condition.
Prior to the introduction of the Mandatory Conditions under the new licensing Act, discount schemes were common place, particularly in members clubs like golf and bowling clubs. Following the transition to the new Act, many clubs stopped their discount schemes for fear of falling foul of the Mandatory Conditions and being faced with the wrath of Licensing Boards. It remains to be seen whether on the back of this ruling discount schemes will start to be reinstated and if other operators seek to take advantage of this legal loophole.
If you would like any more information on this case or in relation to licensing matters generally, please contact Nicolas McBride.
Posted: 10.12.10