Introduction of a direct sales licence as a sub-category of the liquor store licence

The Department of Racing, Gaming and Liquor (Department) has sought feedback in relation to the introduction of a direct sales licence as a sub-category of the liquor store licence.  In essence such a licence would authorise the creation of virtual liquor stores on the Internet with sales taking place electronically without the need for physical or terrestrial premises.  Browse facilities would not be required.  Sales could be processed at the nominated office address.  The liquor could be stored at a warehouse facility, which would not be open to the public, and sent directly to the purchaser from there.  The proposal contemplates there would be no trading hours restriction on the licence.  Orders could potentially be made and processed 24 hours a day, seven days a week.  The licensee would, however, be restricted to delivering the liquor to the purchaser’s nominated address only during trading hours specified in the Liquor Control Act 1988 for metropolitan liquor store licences.

A licence of this kind already operates in South Australia and Victoria.  In South Australia a direct sales licence ‘authorises the licensee to sell liquor at any time through direct sales transactions (provided that, if the liquor is to be delivered to an address in this State, the liquor is despatched and delivered only between the hours of 8am and 9pm and not on Good Friday or Christmas Day)’.  This licence type has proven popular in South Australia where over 400 such licences operate.

The Department’s discussion paper on the subject has stated that if this licence were to be introduced, direct sales licensees would be prohibited from:

• inviting or admitting prospective purchasers of liquor to any premises or place at which liquor is displayed or stored for sale by the licensee;
  
  
• delivering liquor to unattended premises or juveniles;
  
  
• allowing purchasers to collect the liquor from any premises or place at which liquor is displayed or stored for sale by the licensee; and
  
  
• delivering to an address in this State outside of the hours of 8am to 10pm Monday to Saturday and 10 am to 10pm Sunday and not on Good Friday or Christmas Day or before noon on Anzac Day.

Potential consequences

Internet retailing has clearly proven to be a convenient way for modern day shoppers to purchase goods and services.  A direct sales licence will enjoy low overheads and facilitate the creation of small operations without the burden of infrastructure.  It would seem direct sales licensees could potentially operate from their homes processing orders 24 hours a day.  Is it a good thing for the new licence to raise the distinct prospect of many liquor suppliers operating in residential suburbs from private homes?

As it is currently proposed, a direct sales licence would authorise a licensee to operate on Sundays between 10am and 10pm with no apparent distinction for licensees located outside of the metropolitan area or the locality of potential purchasers.  This being the case, could a licensee of a country liquor store who also holds a direct sales licence take orders electronically or over the phone and deliver liquor to customers on Sundays?  If so, it would offer country liquor stores the opportunity to trade in a de facto manner on Sundays without a Sunday extended trading permit.

The introduction and operation of many such licences could potentially have significant detrimental effects on other packaged outlets.  Much business could be lost to traditional licensees.  Is this in the public interest?

The Department's discussion paper flags the possibility of direct sales licences being capable of being run without an approved manager on duty at all times.  Is this not a fundamental shift away from the regulatory requirement to have an approved manager on duty at all times liquor is sold?

Would a public interest assessment be necessary to support an application for a direct sales licence?  If not it would be a cheap and easy way of obtaining a licence.

Are there potentially inherent problems with the proposed delivery system which may be utilised?  Although the discussion paper states that a licensee shall not deliver liquor to unattended premises or juveniles, how will that be regulated and controlled?  The paper does not state that the delivery persons need to be trained in the responsible service of liquor.  Direct sales licensees could engage contract couriers who may not even be aware of the contents of the freight.  The drivers may inadvertently deliver liquor to a minor, a drunk person, a dry community, liquor restricted premises or unattended premises.  What would stop liquor being delivered to post office addresses, particularly in the country?

The direct sales licence may also contribute to the problem known within the industry as ‘pre-loading’.  Persons drinking at home before going out could potentially order more liquor to be delivered to their house should they run out allowing them to continue drinking before visiting licensed premises.

Conclusion

The decision to introduce this innovation should not be made lightly.  There are many issues and ramifications to be considered.  The Department is calling for comments on the proposal.  Feedback is required to be made in writing before 19 March 2012.

If you require assistance in drafting your response or have any other liquor licensing queries please do not hesitate to contact: