Passing off premium alcohol for generic alcohol

Occasionally, we do come across circumstances where it is discovered that licensed premises have been involved in the passing off (substitution) of premium brands with cheaper ones, presumably to increase profit margin.

Passing off, as this practice is commonly known, occurs when a business misrepresents its goods or services as being a higher quality or a well-known brand, when in fact, they are not. An example being a bartender serves a cheaper, generic vodka while charging the customer for a more expensive premium brand, such as Smirnoff. Or similarly, passing off dishes for cheaper alternatives e.g. catfish as cod.

This misleads consumers into thinking they are receiving the quality they paid for, but in reality, they are being overcharged for a low quality product. Passing off cheap spirits defrauds customers and violates the Consumer Protection from Unfair Trading Regulations.

Please note: This applies to all traders in all sectors who sell products or services to consumers.

The regulations play a pivotal role in safeguarding consumer rights, as they mandate that businesses provide accurate and transparent information. This allows customers to make informed decisions about the goods and services they purchase.

With particular regard to alcoholic products, the same technical legal breach can occur for a less sinister reason. We have come across cases where the vodka in question is indeed the premium vodka which it claims to be but, a laboratory test has revealed that its composite elements are different and / or that the abv is lower than what is shown on the bottle.

This can occur due to poor storage of the alcohol in question allowing processes of evaporation and condensation to effectively dilute and mutate the product in question.

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What is the risk to the business?

Should an investigating Trading Standards officer discover a problem with your spirits, whether caused deliberately or otherwise, then a formal investigative process is likely to follow.

This will undoubtedly involve a request to attend an interview under caution. At this point, it is crucial to take legal advice!

This process can be harrowing for whichever individual decides to present themselves as the face of the company that runs the business.  Preparation for such an interview is key. The experience of a legal advisor in dealing with such interviews can massively assist in preparing properly.

Indeed, it may be that we can persuade the investigating officer to deal with the interview in writing. This provides the opportunity to consider the questions posed and produce appropriate responses, together with supporting documentation.

What is the purpose of an interview under caution?

The purpose of the interview from the investigator’s perspective is to solidify the evidence that they have gathered with a view to prosecution.

The purpose of the interview from the operator’s perspective will be to endeavour to present a case which dissuades the investigator from prosecuting, and / or lays the foundations for mitigating the ultimate damage (financial and reputational) which inevitably flows from an actual prosecution.

Alternatively, the investigator may decide that offering a formal caution is appropriate, rather than taking the matter to court, even if the evidence justifies prosecution.

Prosecution

If a prosecution becomes inevitable, do not underestimate the potential reputational damage. There will undoubtedly be media coverage arising from any such Court proceedings.

Additionally, the costs of dealing with such proceedings are considerable and the fines are potentially unlimited.

Although we are yet to see an example of this, it would be technically possible for the investigating officer to apply for a review of the Premises Licence with the usual range of options available within those proceedings, including the ultimate sanction of revocation of that licence.

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