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  • Public law
  • 06-05-2020

The Alcohol Decree [Alcoholbesluit] and the Alcohol Regulations [Alcoholregeling], both of them now open for public consultation, contain rules for further detailing of the Alcohol Act [Alcoholwet], which has been under consideration by the House of Representatives since 15 November 2019 *1. The Alcohol Act is not in fact a completely new piece of law. From a technical legal point of view, parts of the existing Licensing and Catering Act [Drank- en Horecawet] (the “DHw”) are being amended, with the DHw being renamed the “Alcohol Act”. Because the law itself is not being replaced, the current regime of the DHw remains largely in place. In this blog, we present a number of considerations that may help in submitting an opinion [zienswijze] regarding the Alcohol Decree and/or the Alcohol Regulations. 

Distance selling: secure method of operation and age verification system
Section 20a of the Alcohol Act aims to increase observance of the age limit in the case of distance selling and to improve enforcement of that limit. The legislature has devised two means for achieving this: (i) having a secure method of operation [geborgde werkwijze] and (ii) having an age verification system in place. The Alcohol Decree and the Alcohol Regulations that are now under consideration comprise the rules for further implementation of these means of ensuring observance. 

The Alcohol Decree contains detailed rules on the use of a “secure method" *2.  That method must ensure that alcoholic beverages ordered online or by phone are delivered only to an adult purchaser. Vendors that supply alcoholic beverages by means of distance selling *3 will therefore need to draw up a document (the secure method) and keep it up to date at all times. Pursuant to Section 13 Alcohol Decree, that document must contain a description of how the vendor ensures the following:

  • for each transfer of alcoholic beverages (both between any parties in the supply chain and delivery to a purchaser), the age of the person to whom the delivery is made must be determined in accordance with Section 20(2) Alcohol Act *4;
  • the alcoholic beverage is delivered only to the address of the addressee or to a distribution point;
  • the secure method of operation is known and clear to those working under the responsibility of the vendor; and
  • the vendor carries out an investigation at least once a year into the performance of its obligations under and pursuant to Section 20a(1)(b) Alcohol Act, and corrects any shortcomings found.

The Alcohol Decree, and in particular the Alcohol Regulations, contain the detailed rules for the “age verification system”. In addition to the time of delivery, Section 20a Alcohol Act stipulates that the age (18 and older) must also be checked at the time of purchase. Pursuant to Section 6 of the proposed Alcohol Regulations, the age verification system:

  1. must determine for each purchase, before the sale agreement is concluded, that the purchaser has reached the age of 18 (for example by asking what his/her age is);
  2. must require the purchaser to actively perform an action in order for his/her age to be determined in the manner referred to in point a. (such as ticking his/her age or communicating his/her date of birth); and
  3. must state for each purchase of an alcoholic beverage, before the sale agreement is concluded, that the age of the person to whom the alcoholic beverage is to be delivered will also be determined at the time of delivery. 

At the moment, this system still does not seem to be watertight. On 16 April 2020, the Advisory Board on Regulatory Burden (ATR) noted that the legislature has not clarified whether the age verification system actually improves verification. The Explanatory Memorandum for the Alcohol Regulations shows that the age verification system will eventually be replaced by a new online age verification system that will supposedly be able to verify the age of the purchaser (more) reliably and unequivocally *5. The system – which is designed to be affordable and applicable for entrepreneurs – will then become operational, with a reasonable transitional period. The above would seem to indicate that with the new rules the legislature is apparently anticipating a reliable system that has yet to be developed. The ATR considers that it would therefore be advisable to wait to introduce rules until there actually is an effective age verification system *6. After introduction of the mandatory online age verification system, the only remaining means of selling/reselling alcoholic beverages will be via the Internet *7. From then on, ordering remotely by phone will no longer be permitted, because an online age verification system cannot be used over the phone *8. The legislature considers this proportionate in view of the risks of the age limit not being complied with. This means that companies will then no longer be able to use the phone for distance selling but will have to depend on selling via a webshop. 

Courses and tastings in off-licences

The current DHw includes two types of licences: 

  • a licence to supply alcohol commercially or in return for payment for consumption on the premises (i.e. to run a catering establishment); and 
  • a licence to supply alcohol commercially or in return for payment for consumption elsewhere than on the premises (i.e. to run an alcohol retail establishment, that is: an off-licence). 

At present, alcohol may not be supplied for consumption on the spot in an off licence (i.e. in the closed-off sales area of the retail establishment) *9. After all, an off-licence does not have a licence to operate a catering establishment, nor – pursuant to Section 14(1) DHw – is it permitted to incorporate such an establishment. In short: an off-licence is not permitted to serve alcohol and a catering establishment is not permitted to sell it for consumption elsewhere. At present, therefore, it is not possible for off-licences to offer closed tastings in the sales area (which presupposes consumption on the spot and incorporation). 

In the course of a pilot project on “regulating shop/hospitality combinations”, organising tastings at off-licences was assessed positively. Section 25e Alcohol Act therefore proposes that tastings and courses concerning alcoholic beverages can be permitted – at a local level, pursuant to a municipal by-law, and subject to certain conditions *10 – in all the off-licences of a municipality. The Alcohol Decree as currently open for public consultation includes conditions to prevent a situation from arising in which the line is blurred between a tasting on the one hand and a pub on the other. Section 14 Alcohol Decree therefore lays down specific conditions under which municipalities may make it possible, pursuant to a municipal by-law, for off-licences to organise courses and paid tastings outside their normal opening hours, and when that is permitted under the Trading Hours Act [Winkeltijdenwet]:

  • A maximum of one tasting per off-licence per day.
  • The charge for participating in the tasting has been determined by a manager of the off-licence before the start of the tasting.
  • The participants in the tasting are known to a manager of the off-licence before the start of the tasting.
  • The door of the off-licence is closed during the tasting.
  • However, off-licences are (still) not permitted to sell other food or products as well. Accessories within the meaning of Section 2 Alcohol Decree (wine coolers, information material, wine racks, pouring stoppers, etc.) may however be sold. 

Although the second subsection of Section 14 Alcohol Decree has been worded rather poorly, so that it seems open to multiple interpretations, the Explanatory Memorandum makes clear that it is forbidden to sell alcohol during the tasting for consumption elsewhere than on the premises, with the exception of specifically those drinks that were tasted by the participants during the tasting. 

This new possibility therefore concerns an exception to the prohibition on supplying alcohol on a commercial basis without a licence or other than for no charge (in return for a payment) for on-the-spot consumption in an off-licence. In practice, it appears that regulators adhere to the position that “commercial supply” also includes supplying alcohol for no charge in the course of business. However, the Explanatory Memorandum refers repeatedly to “paid” tastings (whereas Section 25e Alcohol Act does not seem to be limited to paid tastings). The Alcohol Decree also explicitly states as a condition that the cost of participating in a tasting must be determined by a manager of the off-licence before the tasting begins. The question is whether or not, because of these contradictions, the legislature wishes to permit municipalities to also permit tastings for which the cost is set at €0 and the tasting is therefore free of charge (for example for promotion purposes). It would be a good thing for this point to be clarified in the Explanatory Memorandum.

Incidentally, it still the case that a manager whose name is stated in the annex to the licence must be present when the retail outlet is open (and therefore also outside normal opening hours). 

Managers and the obligatory Social Hygiene Declaration

Under the DHw and the proposed Alcohol Act, a “manager” [leidinggevende] is understood to mean: 

  1. the natural person or the directors of a legal entity, or their authorised representatives, for whose account and risk the hospitality establishment or the off-licence is operated; 
  2. the natural person who exercises general management of an enterprise within which the hospitality or off-licence business is operated in one or more establishments; 
  3. the natural person who exercises direct management of the operation of such business in an establishment (Section 1 DHw, soon to be the Alcohol Act). 

Managers are required to have sufficient knowledge and understanding of social hygiene (the familiar “Social Hygiene Declaration” [Verklaring Sociale Hygiëne]). That remains unchanged. 

A new feature of the Alcohol Act is that such persons will be registered in the Social Hygiene Register (Section 8(3) Alcohol Act). Also new is the setting up of a National Social Hygiene Commission [Landelijke commissie sociale hygiëne] (Section 11a Alcohol Act). The task of the Commission will be to accredit diplomas, to register persons in the Social Hygiene Register and issue the Declaration of Knowledge and Understanding of Social Hygiene [Verklaring kennis en inzicht sociale hygiëne] to those persons, and to make the Social Hygiene Register available for consultation by anyone on the basis of surname, initials, and date of birth (Section 11c Alcohol Act). This will basically apply to all managers, including, for example, the directors of hotel or cinema chains. In particular the accessibility of the Social Hygiene Register can in our opinion have far-reaching consequences. 

What the Alcohol Decree and the Alcohol Regulations do not change, but which we believe should be considered, are the requirements imposed on the aforementioned categories of managers. The current – rather restricted – exception to the rule remains unchanged under the Alcohol Act: the obligation to have sufficient knowledge and understanding of social hygiene does not apply to managers “for whose account and risk the catering establishment or the off-licence is operated, if those managers are not involved in the operation or exploitation of the catering establishment or off-licence for which a licence is being applied for or has been obtained and the licence holder confirms such in a written statement” (Section 8(4) Alcohol Act). This exception appears to offer a solution for larger chains, but the threshold for its application is a high one. Practice shows that municipalities are all too familiar with the restricted interpretation that the legislature wished to apply to this exception, as the Explanatory Memorandum reveals: “Another problem identified by the business community is that it is impossible for a very limited number of managers for whose account and risk the catering establishment or the off-licence is operated to comply with the requirement to have sufficient knowledge and understanding of social hygiene, for example because they are permanently abroad or because there is a serious physical or mental disability." *11

Because of this restricted interpretation, the aforementioned legal exception does not offer a solution in the case, for example, of the larger companies or chains, where alcohol is served at establishment level. As a result, for example, a management that is currently based at a head office in the Netherlands, at a distance, where that catering activity is not carried out, still has to obtain a Social Hygiene Declaration because it does not have a serious physical or mental disability. In practice, this appears to be problematic and the choice is made, for example, to appoint an authorised representative (which in itself often leads to objections for commercial reasons), or to register proxies at the level of individual establishments. These, however, are extra-statutory solutions, and it is not uncommon for municipalities to be stricter than necessary. It also leads to an arbitrary situation: it is a workable solution in municipality A, while in municipality B it is not. With the revision of the DHw into the Alcohol Act and its elaboration in the Alcohol Decree and the Alcohol Regulations, an opportunity has been missed to ensure clarity precisely with regard to this matter. That could have been done at the level of the Act itself, for example by reformulating the definition of “manager” or the scope of the exception for managers who are not involved in actual operation. However, the Alcohol Decree, whether or not in conjunction with the Alcohol Regulations, also offers scope for tackling this problem, for example by defining which specific categories of (actual) managers require a Social Hygiene Declaration in which cases, or, finally, by leaving that for the National Social Hygiene Commission to decide.

Statements of Views or opinions regarding the Alcohol Decree and the Alcohol Regulations can be submitted up to 11 May 2020.

Footnotes

  1. Parliamentary Documents II [Kamerstukken II] 2019/20, 35337, 2. 
  2. The basis for this would be the future Section 20a Alcohol Act.0.
  3. Draft Section 1 Alcohol Decree.
  4. In short: verification on the basis of a valid identity document or in another specified manner. This verification may be omitted in the case of a person who has unmistakably reached the required age.
  5. Explanatory Memorandum Alcohol Regulations, p. 2. 
  6. Consultations on Alcohol Regulation, response of Advisory Board on Regulatory Burden, The Hague, 17 April 2020.
  7. Parliamentary Documents II, 2019-20, 35337, No. 3. 
  8. Parliamentary Documents II, 2019-20, 35337, No. 3, p. 8.
  9. Unless it concerns an employee on duty at the off-licence who allows a customer to taste the alcohol available in the off-licence free of charge when that customer requests it (see Section 13 DHw).
  10. . A tasting can take place if three cumulative conditions have been met: (1) a municipal by-law must have been adopted pursuant to Section 25e Alcohol Act; (2) the course concerning alcoholic beverages or the paid tasting must be held at a time when the off-licence is permitted to open its shop under or pursuant to the Trading Hours Act; and (3) the time of the course or paid tasting must fall outside the normal opening hours of the off-license in question (see Parliamentary Documents II 2019/20, 6, p. 29).
  11.  Parliamentary Documents II 2008/09, 32 022, No. 3..

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