BE THE BOSS OF YOU OWN LIQUOR LICENCE

Liquor Licencing

The current position regarding liquor licensing in the Republic is as follows:

“Liquor” is divided into manufacturing, distribution and retail sales.

Subject to what is said below regarding micro manufacturing, manufacturing and distribution falls under the Liquor Act, 59 of 2003 which makes it a competency of national government in the Department of Trade and Industry – DTI – and administered in the department by the National Liquor Authority – NLA.

Manufacturing is defined as 'manufacture' means to produce or bottle liquor or methylated spirits for the purpose or with the intent of selling it;

Distribute is defined as 'distribute' means to offer liquor or methylated spirits for sale, or sell it, to a registered person;

A registered person is the holder of a provincial licence or registration, an exempted person and a person who is registered with the NLA.

A distributor is what was previously referred to as a wholesaler.

No liquor licence or registration was required for the manufacturing of liquor before 2003, only for the selling thereof.

Micro manufacturing is to manufacture liquor in quantities less than the prescribed volumes. Regulation 12 provides:

(1) A micro-manufacturer may not exceed the following threshold volumes of liquor for the purposes of section 4(5)(a) of the Act:

(a) for manufacturers of beer, 100 million litres per year;

(b) for the manufacture of Traditional African beer, 50 million litres per year;

(c) for manufacturers of wine, 4 million litres per year; and

(d) for manufacture of spirits and/or any other liquor, 2 million litres per year.

(2) If a person manufactures liquor of more than one of the categories listed in sub-Regulation (1), and falls above the threshold for any of those categories, that person is deemed to fall above the threshold for all the categories.

In terms of provincial legislation, which is different in each province, one can be licensed or registered – the same thing – for micro manufacturing the same as for the retail selling of liquor. Some provincial legislation specifies various licences and some only on-consumption and “off-consumption”

This means that if one wants to distribute or manufacture, you must apply to the Minister of the DTI through the NLA in accordance with the Liquor Act, 59 of 2003, and the regulations thereto, making use of the prescribed forms. NOTE: what has been said up to now runs parallel with the SARS requirements for the registration with SARS for excise tax. This is a separate matter which will be discussed later in a separate article.

The NLA has introduced an online system in respect of new applications and renewals. This is ultra vires but until challenged in court, that is the way to go.

If one wants to apply for a retail liquor licence / registration, one must do so in terms of the applicable Provincial legislation with its regulations and prescribed forms.

Once again some of the provinces, vis Mpumalanga and Gauteng, introduced a partial online system which is ultra vires because it is not defined and or prescribed. Until it is challenged in court, one must follow the same.

Existing liquor licences must be renewed every year. In Gauteng, KZN and Mpumalanga the renewal date is linked to the original date on which the liquor licence or registration was initially issued. In the other provinces it is before or on 31 December of a year, with some indulgences provided for in some provinces.

Registrations with the NLA must be initiated one month before the expiry date of the registration. In the Case of the NLA, differently from the provinces, non-renewal does not lead to the lapse of the registration. It remains in place until cancelled and no longer displayed in the registration register of the NLA.

Gauteng has taken a resolution that Gauteng liquor licences can be renewed beyond the “lapse date” provided for in the Gauteng Liquor Act, 2 of 2003. This is legally untenable and simply ultra vires and unlawful, but they keep on doing it. We refuse to make use of this as we believe that everything must take place within the ambit of the empowering legislation.

All liquor licences and registrations, whether provincial or with the NLA, are transferable, i.e. it can be transferred from the current licensee or registrant, to a new one.

Provincial liquor licences or registrations can also be “relocated” in all the provinces excluding Gauteng and Mpumalanga. In the last mentioned two provinces one has to apply for a new liquor licence for the new locality and when granted, the old liquor licence does not automatically lapse, meaning that if you move your restaurant from Smith Street to Jones Street, you can sell your old licence to the tenant who takes over the Smith Street premises.

There are other issues or steps that needs to be dealt with and done according to the applicable provincial legislation. Examples are structural alterations to a licenced or registered premises, appointment of responsible persons which is generally required for non-natural persons as licensees, etc. This is a subject for a separate article.

You are welcome to contact our Mr Blom on (012) 004 0244 or marius@mariusblom.co.za for further information.