By Silver Kayondo
Parliament of Uganda last week took the initiative to revive a private member’s Bill that seeks to regulate the alcohol industry. The Alcoholic Drinks Control Bill, 2016, is a brainchild of Betty Nambooze, the Mukono Municipality Member of Parliament.
Among other provisions, the Bill seeks to repeal the archaic Enguli (manufacture and Licensing) Act of 1966, regulate drinking hours, gazette liquor trading premises, provide for penalties in case of violation, and regulate licensing of liquor stores.
This article will concentrate on the proposed liquor licensing requirement for liquor trade in Uganda, since it is one of the most contentious areas in alcohol regulatory frameworks.
At its most basic level, a license is permission to do something that would otherwise be unlawful. It is normally issued to overcome a statutory prohibition. The most famous case pertaining to liquor licensing on the African continent arose from South Africa. In the case of Shoprite Checkers (Pty) Limited vs Member of the Executive Council for Economic Development, Environmental Affairs and Tourism, Eastern Cape and Others (2015), Shoprite sought confirmation of an order made by the Eastern Cape Division of the High Court, declaring certain provisions of the Eastern Cape Liquor Act Eastern Cape Act constitutionally invalid.
The major provisions in the said law are similar to the proposed Alcoholic Drinks Control Bill of Uganda. Shoprite contended that this change of regulatory regime amounted to an arbitrary deprivation of its property. The High Court agreed. The matter went on appeal to the Supreme Court of Appeal, and eventually, the Constitutional Court which said the following about a liquor licence:
“…a liquor licence is the permission that a competent authority gives to someone to do something with regard to liquor that would otherwise be unlawful. The activity in question is usually the sale of liquor at specified premises. It also seems that the term ‘liquor licences’ in its natural signification encompasses not only the grant or refusal of the permission concerned, but also the power to impose conditions pertinent to that permission, as well as the collection of revenue that might arise from or be attached to its grant.”
By and large, the proposed licensing requirements do not constitute an interference with, and a diminution of the liquor retailers’ vested right to trade as license holders in premises from which they have been operating.
In terms of arguments against the proposed Bill, some industry experts have submitted that the Bill is unnecessary because the industry is already self-regulating. However, from the above cited legal perspective, it is clear that government has the autonomy to regulate the alcohol industry in public interest. Furthermore, the competence to do this kind of business originates from state approval and its continuance is dependent on state powers of amendment, cancellation and regulation because licences are subject to administrative withdrawal and change. They are never absolute, often conditional and frequently time-bound.
In an article titled, Liquor license – privilege or property, James J. Leonard, A US criminal defense attorney, supports the approach that when faced with a problem involving a liquor license, most courts start with the premise that such a license is a governmental grant which authorises the grantee to engage in a business which would otherwise be unlawful. There is no right contained in the Constitution to sell liquor.
In the case of Crowley vs Christensen (1980), the US Supreme Court held that there is no inherent right in a citizen to sell intoxicating liquors and it is not a privilege. To this end, the Constitutional Court of South Africa recognised that in light of the public law origin of liquor licensing law, it does not fit easily into a private law conception of rights and property. It is underpinned by public interest and public policy considerations.
Therefore, in achieving the desired objectives, the proposed Bill must strike a balancing act between imposing regulation and control over the access to and abuse of alcohol, which can cause negative socio-economic consequences as well as having direct and indirect effects on health.
On the other side, the legislative framework should also be cognisant of the potential economic benefits of trading in liquor for the holders of licences and the State. Maximising the benefits of liquor business to the economy must be assessed against the negative costs of alcohol abuse.
By and large, the proposed licensing requirements do not constitute an interference with, and a diminution of the liquor retailers’ vested right to trade as license holders in premises from which they have been operating. Investments made in terms of marketing and brand development are also not interfered with since the proposed legislative measures do not strip liquor retailers of their right to trade.
The Bill simply requires liquor vendors to continue with their right to trade, but from inspected and compliant premises. This is particularly not surprising considering that one of the leading causes of alcohol abuse is the ease of its availability in terms of location, time of sale and cost.
Mr. Kayondo is a lawyer
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