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9 Ways You Could Lose Your Liquor Licence

By Darragh Timlin on October 8th, 2022

Bar and restaurant owners worry about many things while operating their businesses. One of the most concerning worries is losing their liquor licence, which would significantly impact their bottom line and put customers off frequenting their establishment.

One of the most sensible moves any pub or restaurant owner can make is to protect themselves with loss of licence insurance cover, which you can include as part of your business insurance.

It is often the case that pubs and restaurants will rely on income from alcohol sales as food sales margins are thin. If you lose your liquor licence or are charged with an expensive fine for serving underage drinkers – even by accident- it could be the end of your business.

What Are The Most Common Reasons For Losing A Liquor Licence?

There are plenty of ways for a pub or restaurant owner to lose their alcohol licence in the UK. This is a summary of the most common reasons for business owners that sell alcohol to lose their liquor licence:

1: Serving Minors / Neglecting to Check Ids

Your bar staff must check the photo ID of anyone ordering drinks that look underage. If you or your team don’t correctly check for underage drinking and serve alcohol to minors, you will lose your alcohol licence.

Serving underage drinkers is one of the most common reasons for losing your alcohol licence in the UK. This is why you must train your staff to check ID’s if they are unsure about the age of a customer ordering drinks.

2: Employees Who Aren’t Legally Able to Serve Alcohol

As well as being mindful not to serve underage drinkers, you must ensure that any underage staff you employ don’t serve alcoholic drinks to your customers.

Many pubs and restaurants hire part-time teenagers and students to cover holidays and busy periods. Still, staff being rushed off their feet is no excuse for letting an underage member of staff serve alcohol on your premises.

Your staff must be at least 18 years old to be legally allowed to serve alcohol, unless all sales to customers are approved. This means 16 and 17 year olds can sell alcohol under supervision. So make sure any teenage staff you employ understand their duties and know to call another team member to serve alcoholic drinks should a customer request them.

3: Staff Drinking While Working

While many customers may want to buy a drink for their waiting staff or the server behind the bar, drinking on the job can be a health & safety issue. Accepting monetary tips is fine for delivering good service, but sometimes customers will offer a drink as a reward.

Your staff should be polite and thank them for the offer, but decline and state that they are not allowed to drink while on shift. Staff under the influence of alcohol can put themselves, their teammates and their customers at risk of accidents, which will have serious consequences.

Should your staff or customers become injured or have their possessions damaged because of drunk staff, you will fail your duty of care to your staff and customers and could lose your alcohol licence.

4: Allowing Drinking In Unlicenced Areas

As a responsible pub or restaurant owner, you will have an alcohol licence to cover your immediate premises. However, your licence may not extend to cover you serving drinks outside your premises.

If you have a beer garden or an outdoor patio with tables and chairs for your customers, ensure that your alcohol licence covers these areas. Never assume that your alcohol licence covers all of your property and grounds.

During the warm summer months, setting up tables and chairs in front of your property on the street by your front door can be tempting. However, your alcohol licence may not extend to cover the public footpath in front of your property, so serving drinks on the street will be illegal and will result in you losing your liquor licence.

5: Serving Intoxicated Patrons

As a licenced pub landlord or restaurant proprietor, you can serve alcoholic drinks, but you can decide when a customer has had enough. You can prevent your customers from getting too drunk by capping the number of drinks they can be served and refusing to serve them if they become dangerously intoxicated.

Intoxicated customers risk the health and safety of themselves, your staff and other customers. Efforts should be made to encourage customers to take soft drinks, food and water between alcoholic drinks if they have planned an evening at your establishment.

Should a customer turn up already drunk, you are allowed to refuse their order for more drinks, especially if you think drinking more will put them at risk. Should you serve alcoholic drinks to an already intoxicated customer and something happens to them, you could be held liable for worsening their condition and losing your alcohol licence as a result.

6: Disorderly Conduct

Should you allow your customers to get drunk and cause a public nuisance through disorderly conduct while on your premises and after leaving your establishment, you could have your alcohol licence removed.

Repeated late nights of loud customers spilling out into the streets after hours will surely raise complaints from local residents, business owners and other customers. If the police receive regular complaints, they have a duty of care to follow them up with a visit to your premises.

The police can initially give your verbal and written warnings, but if the complaints persist, they will have enough grounds to revoke your alcohol licence and even close down your business.

7: Not Reporting Illegal Activities

Pub and restaurant owners hold alcohol licences to cover ‘licensable activities such as:

  • The retail sale of alcohol,
  • The supply of alcohol in clubs,
  • The provision of late-night refreshments, and
  • The provision of regulated entertainment

Regulated entertainment is defined as:

  • A performance of a play,
  • An exhibition of a film,
  • An indoor sporting event,
  • A boxing or wrestling entertainment (both indoors and outdoors),
  • A performance of live music,
  • Any playing of recorded music, or
  • A performance of dance

Anything that falls outside of these activities won’t be covered by your alcohol licence and is deemed as an illegal activity. This is when you must notify the licensing authority.

Suppose you discover that your staff or customers are using your pub or restaurant for illegal activities such as drug dealing or unlicensed gambling. In that case, you have a duty under the law to report these illegal activities. Failure to do so will see your licence revoked.

8: Neglecting to Keep Proper Documentation

Keeping on top of your bookkeeping and meeting your filing responsibilities is required by law. If you are audited or investigated, and it is found that you don’t keep accurate or legitimate records, you could lose your licence and have your business closed down.

You must show that your alcohol was procured legally before being sold to your customers and that you are paying the correct taxes and duties. Your staff also needs to know the seriousness of keeping accurate records for every alcohol sale on your premises.

9: Being Convicted of A Crime

If you hold an alcohol licence and then are convicted of a crime, your local council will decide if your crime impacts your ability to have a licence. You may lose your licence if your criminal offence shows you are a risk to the public or that you are not suitable to work in the industry.

For example, if you are convicted of drunk driving or dangerous driving where you get a driving licence suspension, you may not be fit to hold a liquor licence.

The nature of your crime can determine the outcome, so if it was a low-level offence where the penalty resulted in a caution or fine from a police officer, you might be able to hold onto your licence. However, a more severe conviction can see the loss of your alcohol licence.

Can I Protect My Business Against The Loss of My Liquor Licence?

Keeping your original licence document safe and on display on your premises is essential. A notice specifying the position of the person responsible for maintaining the licence must also be on public display.

If you lose your original licence certificate, you can obtain a certified copy of your certificate to display – a photocopy won’t be sufficient.

Make sure you pay your annual licence fee on time. Failure to do so will see you get a licence suspension or it being revoked entirely, and you have to re-apply to get back your lost licence.

Conclusion

Operating a pub or restaurant in the UK is subject to tight regulation, so you must ensure you do your best to meet your requirements under the law. It also makes excellent business sense to protect your livelihood with the appropriate cover, reduce risk where possible, and include loss of licence insurance. At Brisco Business, we believe in proactive risk management. Let us help you identify potential vulnerabilities and mitigate them with the right business insurance.

Darragh Timlin

With over 25 years’ experience, Darragh is an expert in all things insurance. Starting his career in commercial property underwriting, Darragh has worked for a number of global insurers and is now Managing Director of Brisco Business, part of the wider Henry Seymour Group.

All articles by Darragh Timlin

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