What constitutes a sale of alcohol in England and Wales. Are there grey areas? And why does it matter? Here, Piers Warne, a legal director specialising in licensing at TLT solicitors and part of their specialist hospitality team, explains all.

Let’s start with the basics: Licensing legislation in the context of alcohol is concerned with selling it from regulated premises. Therefore the world, according to law, is neatly divided into two: premises where alcohol can be legally sold; and the rest of England and Wales. 

As a small aside, and given the rise in popularity of low alcohol and zero alcohol beers and ciders, it is worth noting that any drink below 0.5% ABV at the time of sale falls outside of the definition of an alcoholic drink and therefore would be exempt from what follows.

As a basic principle, it is illegal to sell alcohol in the vast majority of the universe, outside of licensed premises. But matters are not quite that simple. Sales of alcohol are defined in S1 (a) Licensing Act 2003 as relating solely to ‘sales by retail’ of alcohol or, for completeness, supply of alcohol in the context of private member’s clubs. So, firstly, wholesale of alcohol is not regulated. This is explicitly set out in the Licensing Act (s.192(2), for those who are interested) as an exemption from the definition of sale. 

Therefore a ‘sale’ to a trader, a personal licence holder, a premises licence holder or a premises user in relation to a temporary event notice permitting sales of alcohol- where that person is then selling the alcohol on, is not a ‘sale’ in the eyes of licensing law. The reason is this: only the person selling the alcohol to the consumer needs to hold a licence. In practical terms, a brewery does not need a premises licence to sell alcohol, so long as the sales are wholesale. This is well understood, of course.  

So, a sale will only ever be a sale if it is to a consumer. But we still have not clarified what a ‘sale’ in this context is. For instance, if you buy a ticket to an event which includes a ‘free’ drink, would this be a sale? What if you give alcohol away to customers, but ask for a voluntary donation, or perhaps, make it necessary for the person receiving the free drink to buy a beer mat, for, say the price of a pint? All of these have been tried in the past. Most have fallen foul of the law. 

This is because the first offence set out in the legislation relating to sales of alcohol makes it illegal to ‘carry on to attempt to carry on’ a sale of alcohol from any premises not licensed to do so. This includes premises with a licence where the sale is outside of the scope of that licence. This is why the old fashioned ‘lock-in’ is illegal. The offence, if there is deemed to be a sale, can occur anywhere…  

So why would it be a sale, for instance, to give away free drinks as part of an event where customers buy tickets to attend? Sales, in this context are broadly defined. Where there is a requirement to purchase a ticket before receiving any ‘free drinks’, this would be considered a sale as there is a clear value assigned to the gift of the alcohol, whether your guests take you up on the offer or not. 

Other enlightening examples of how this works in practice would be where a hairdresser or bridal boutique offers beer or Champagne to their customers. Where you are incentivised to purchase something, or you are offered a drink once you are in the barber’s chair or trying on dresses, you have value for the drink. This would therefore constitute a sale. To be a genuine give-away, and therefore not a sale, you would technically have to offer the same drinks to anyone passing by who asked, irrespective of whether they then committed to a bit off the top or to tie the knot, or not.  

Some people have attempted to get around having to hold a premises licence by offering drinks to anyone who asks, but then suggesting a ‘voluntary’ donation to keep the premises going, or a ‘voluntary’ purchase of a beer mat at a suggested price more akin to a cost of a pint than a circle of printed card. If the ‘voluntary’ element is in fact more like a ‘wink wink voluntary’ donation, again, there is value for the alcohol and this would not be legal. It is irrelevant whether you make a profit or not. 

It is worth noting that the offence of selling alcohol without a licence, can lead to unlimited fines and potentially up to 6 months in prison for those found guilty of offences, so there can be serious consequences for trying to grift the system. 

On the positive side, let’s look at what you can do without a licence. Giving away samples, for instance, would not be classified as a sale, as there has been nothing of value received at the time of the give-away. This is, of course, so long as there is no requirement for the sampler to buy anything. 

However, some caution is needed to ensure that, if you are providing samples in public spaces, you have the relevant permissions from the council to do so. It is also worth bearing in mind that samples should be exactly that. Also, putting in place measures to ensure you are not giving away alcohol to minors and that samplers are not relying on your largess to get merry makes good practical and legal sense.  

What is the key take-away here? Well, it can be summed up nicely by reference to the ‘sniff test’. If it smells like a scam, it is likely to be a scam. If you start with the premise that giving something away should come with no strings attached, you are unlikely to go wrong but if in doubt, seek advice.