Potential petition problems

07 September, 2007

Q I am fed up with being undercut by supermarkets, so I have started running strategic promotions on certain beers and wines. The prices are pretty suicidal but at least they drive people into the store, and the money I lose on promotional stock is usually made up by the profit on other goods. One supplier has been in touch and threatened to stop supplying me if I continue. Is this legal?

A If you are selling goods below cost price, the supplier is entitled to cut off your supply. You could continue to do deep discounting on grey market stock, if you really feel the strategy is working, but you're risking serious damage to your relationship with the brand owner.

The Portman Group's voluntary code also suggests suppliers agree terms with retailers which discourage irresponsible promotions.

At a time when off-licences are under such scrutiny and test purchasing can catch out even the most diligent of retailers, you probably need to question whether deep discounting is enhancing or destroying your reputation.

Q I want to open a second off-licence on a nearby housing estate. The police know me well and do not plan to object to the store, but there is a petition going around in the area which has attracted several dozens of signatures on the assumption that my shop is going to fuel under-age drinking and general disorder. Will this potentially scupper my plans?

A Unfortunately for you, yes, though the fact the police are on your side may sway the licensing authority.

The Licensing Act 2003 allows any "interested party" to object to a new premises licence and this includes local residents and businesses. The fact people are objecting full-stop to the new store - and not just some aspect of your trading - means that a hearing is inevitable.

Councillors will probably already be aware of the strength of local feeling so you may be given a bit of a rough ride. Be prepared to demonstrate the good practice that has impressed the police at your existing shop, and perhaps have a few concessions up your sleeve. If you are flexible about opening hours or the type of drinks you will and won't sell, you may win round some or all of the objectors.

Such petitions are becoming more commonplace, thanks in part to the media hysteria about a perceived irresponsible attitude among drinks retailers. It may be worth investing in the services of a solicitor or other legal expert to help the hearing go smoothly.

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