Liquor & Gaming NSW Policy and Legislation policy@liquorandgaming.nsw.gov.au

29 October 2019

Re: Northern Sydney Local Health District Health Promotion submission regarding the Enhanced Regulatory Measures for Same Day Alcohol Delivery Discussion Paper

Thank you for providing the opportunity to comment on the Enhanced Regulatory Measures for Same Day Alcohol Delivery Discussion Paper.

Northern Sydney Local Health District (NSLHD) Health Promotion has an active interest in measures to prevent or reduce alcohol-related harms such as malicious damage, interpersonal violence, accidental injury and long-term health impacts. We also have a history of working to reduce the potential of alcohol outlets to be a source of alcohol for minors through initiatives such as the “Online Liquor Gets Audited (OLGA) Project”.

A summary of our recommendations are below:

Recommendations: 1. Establish an alternative approach to assessing social impact for online alcohol sales and delivery,

and exhibit any proposed changes to the liquor licensing process for further comment2. Require any online retailer seeking to deliver alcohol within NSW to formally apply for a full

packaged liquor licence with a no walk-up condition3. Expand the scope of the regulatory reforms recommended in this Discussion Paper to all business

models permitting the delivery of alcohol4. Remove Section 114 (3)(iii) of The Act, thereby prohibiting the option for delivery in accordance

with the customer’s instructions (Authority to Leave)5. Require licensees in all instances to provide written instructions to the person responsible for the

delivery of liquor to only supply to the adult who placed the order or another adult at thosepremises.

6. Remove section 114(7) of the Act, thereby prohibiting minors from accepting liquor on behalf of aparent or guardian

7. Require licensees to provide Liquor & Gaming NSW with details of their online store (website URL,app name etc.) within 30 days from commencement of trading

8. Require licensees to complete an amended Update details of liquor licence form if the currentonline store details change

9. Implement a comprehensive compliance auditing process for packaged liquor licences with nowalk-up conditions

10. Mandate digital age verification using appropriate age gating technology for all online alcoholpurchases

11. Require any package containing alcohol to display a standardised label stating ‘Contains Alcohol:Age Verification Required Upon Delivery’

12. Require a point of purchase declaration that delivery will only be completed if a person aged 18years or over can accept and sign for the goods

13. Mandate a point of sale declaration that delivery will not be made to any person showing signs ofintoxication

14. Mandate that the website landing page prominently displays the ‘Under 18 Prohibited’ pictogram15. Prohibit buy now, pay-later payment options

Background and Context

The OLGA Project involved a review of the relevant sections of the NSW Liquor Act and Liquor Regulation, as well as an audit of all 504 packaged liquor licences in NSW with no walk-up conditions, to determine the parameters in place to prevent young people from accessing alcohol online and the delivery of alcohol to intoxicated people. The OLGA Recommendations Summary Report has previously been provided to Liquor & Gaming NSW and is re-submitted as an appendix to this submission.

In this context, we commend many aspects of the Discussion Paper, which aims to mitigate the considerable risks associated with the growing market of online alcohol sales and delivery.

General Comments

In particular, we commend Liquor & Gaming NSW’s key recommendations of:

Prohibiting all same day deliveries from being left unattended,

Introducing an offence for any person that makes a same day delivery to an intoxicated person, and

Requiring all persons making same day deliveries to complete a responsible delivery of alcoholcourse outlining their supply responsibilities

These three reforms alone will address many of the current shortfalls that exist within the current regulatory framework for online alcohol purchases with same day delivery.

Further to this, we endorse Liquor & Gaming NSW’s recommendation requiring websites to provide an option for temporary or permanent self-exclusion, which is likely to support those seeking to restrict their own alcohol consumption. Restricting the delivery of same day alcohol purchases to residential and business addresses will also limit the availability of alcohol delivery and consumption in public parks and open spaces.

Enhancing the licensing process to better assess applications for online packaged liquor licence applications with same day delivery, is a necessary inclusion. The current social impact assessment is inadequate for this licence type as it does not consider the cumulative impact of the increasing number of online retailers on the NSW community and it is virtually impossible to attribute potential harm from an online licence to a specific location or community. It is noted that these licensing changes have not been disclosed within this Discussion Paper and so any enhancements associated with this recommendation should be exhibited for further comment.

Finally, NSLHD Health Promotion appreciates the complexities involved in regulating this emerging market, with online alcohol retailers having the capacity to supply alcohol across jurisdictions. We commend Liquor & Gaming NSW’s consideration of this issue and the potential solutions proposed in the discussion paper. Our strong recommendation in this regard is to require any online business seeking to deliver alcohol within NSW to formally apply for a full packaged liquor licence with no walk-up condition and be assessed on its potential cumulative impact on the NSW community.

Recommendations: 1. Establish an alternative approach to assessing social impact for online alcohol sales and delivery,

and exhibit any proposed changes to the liquor licensing process for further comment2. Require any online retailer seeking to deliver alcohol within NSW to formally apply for a full

packaged liquor licence with a no walk-up condition

Specific Comments and Recommendations

Limited Scope of Regulatory Reforms Whilst the aforementioned recommendations are necessary and will resolve many of the current “supply” risks specifically associated with the online purchase of alcohol with same day delivery, the limited scope of this Discussion Paper reduces its capacity to adequately regulate the online supply of alcohol as a broader licence type.

NSLHD Health Promotion is particularly concerned with Liquor & Gaming NSW’s intention to leave the regulation of non-same day delivery business models unchanged:

“Potential measures in this paper are not proposed to apply to online orders that are delivered using traditional, slower delivery methods – such as wine of the month clubs and non-same day deliveries from online marketplaces or other online platforms made using regular or express post or courier services that offer next day or later delivery. Slow deliveries are considered lower risk because of the reduced likelihood of manipulation by minors or intoxicated individuals seeking to access alcohol.”

The same day delivery of alcohol presents unique regulatory challenges in regards to the supply of alcohol to intoxicated persons. However, the real and immediate risk of underage supply exists whether delivery is on the same day a purchase is made or not.

Under section 114 (3)(b)(iii) of the Act, a minor needs only to pre-purchase their alcohol online prior to the day they plan to consume it in order for it to be delivered and left unattended in accordance with their instructions.

Further, section 114 (7) could be interpreted as legally permitting a minor to take delivery of a liquor product if they have been requested to do so by a parent or guardian.

The Discussion Paper offers the lower risk profile of “wine of the month clubs” as rationale as to why online alcohol sellers using slower delivery methods should be exempt from the proposed reforms. Indeed, these subscription-based retailers do present a lower risk due to their limited product offerings (wine) and the fact that there is an ongoing cost, both of which are less likely to appeal to younger people.

However, current legislation does not differentiate between business models. Bottle shops offering standard product lines (ie. beer, wine, spirits, mixers etc.) for single purchase non-same day delivery options, have a significantly higher risk profile than these subscription-based businesses, and therefore must be subject to the same regulatory safeguards proposed in this paper.

Case Scenario: A minor places an order using their debit card and provides an authority to leave the items unattended

in a specified location. The licensee complies with this request and provides instructions to an

independent courier service to deliver the alcohol as the (underage) customer has requested. The

delivery driver collects the parcel, complies with the delivery instructions and leaves it unattended at

the specified location. Supply responsibility has essentially been waived as sections 114 (5) and (6) of

the Act provide a legal defence which absolves the legal obligations of both the licensee and the

person responsible for delivery, provided the customer’s instructions were complied with and neither

were aware the offence had been committed.

The Discussion Paper provides further justification for the omission of businesses using slower delivery services with the following statement:

“L&GNSW also recognise that regulating slow alcohol deliveries could create an excessive regulatory burden for postal and courier services, and would necessitate a major change to the way parcels are handled across Australia”

This justification appears to be invalid, as postal and courier service employees responsible for parcel deliveries are already regulated under the Act. Section 114 (4)(b) deals with delivery to a minor and states:

“the licensee, and any person by whom the liquor was delivered on the licensee’s behalf, are each taken to have supplied the liquor contrary to section 117 (2)”

It is impractical to expect alcohol deliverers to have an in-depth knowledge of supply legislation and their legal responsibilities under the Act, without any formal training requirements. Extending the requirement to complete a responsible delivery of alcohol course for all online alcohol delivery drivers, regardless of the business model they operate within, is more likely to ensure they are aware of their existing legal obligations.

Furthermore, implementing this reform more broadly would not necessitate a major change to the way parcels are handled across Australia, as suggested in the Discussion Paper. Products such as StarTrack’s “Airlock” service, which is already available and routinely used by telecommunication companies, requires ID verification at the point of delivery. Incorporating a simple proof-of-age check into the current ID verification process should not be considered an unacceptable regulatory burden.

Recommendations: 3. Expand the scope of the regulatory reforms recommended in this Discussion Paper to all business

models permitting the delivery of alcohol4. Remove Section 114 (3)(iii) of The Act, thereby prohibiting the option for delivery in accordance

with the customer’s instructions (Authority to Leave)5. Require licensees in all instances to provide written instructions to the person responsible for the

delivery of liquor to only supply to the adult who placed the order or another adult at thosepremises.

6. Remove section 114(7) of the Act, thereby prohibiting minors from accepting liquor on behalf of aparent or guardian

Inability to Monitor Compliance A significant omission from the Discussion Paper is Liquor & Gaming NSW’s current inability to effectively monitor licensee compliance with their responsibilities under the NSW Liquor Act 2007 and Liquor Regulation 2018. During the application process, the liquor licence address is recorded as the physical location orders are received (this is often a nominal office space or residential address), rather than the online shop where the alcohol is actually purchased. The website addresses/app names linked to the licences aren’t collected or stored by Liquor & Gaming NSW, which restricts the regulator’s capacity to audit these businesses to ensure they comply with their licensing conditions.

Results from our OLGA Project audit indicated that a large proportion of licensees were non-compliant with the most basic of signage and/or age verification requirements. 62% of the online businesses we audited either did not require the purchaser to supply their date of birth at the time of purchase or did not display the notice:

LIQUOR ACT: IT IS AGAINST THE LAW TO SELL OR SUPPLY ALCOHOL TO, OR TO OBTAIN ALCOHOL ON BEHALF OF, A PERSON UNDER THE AGE OF 18 YEARS

Furthermore, many businesses that did display the notice, included it in a location and size that could not reasonably be expected to alert the user to its contents, as mandated in section 51(2) of the NSW Liquor Regulation 2018.

It is important to note that almost a third (32%) of licences were not able to be located for our OLGA Project audit, rendering attempts at compliance monitoring inaccurate. To ensure these licences are held to the same stringent standards as traditional licences such as bottle shops, clubs and hotels, it is strongly recommended that Liquor & Gaming NSW commit to undertaking regular random compliance audits of all online alcohol businesses, from the online store to audit mandatory signage and extreme discounting, through to purchase and delivery.

Recommendations: 7. Require licensees to provide Liquor & Gaming NSW with details of their online store (website URL,

app name etc.) within 30 days from commencement of trading8. Require licensees to complete an amended Update details of liquor licence form if the current

online store details change9. Implement a comprehensive compliance auditing process for packaged liquor licences with no

walk-up conditions

Additional risk mitigation strategies In addition to the regulatory reforms outlined in the discussion paper, we believe the following risk mitigation strategies are also necessary to safeguard the community from the considerable risks presented by online businesses providing alcohol delivery:

Age gating technology, such as AusPost’s accredited “Keypass in Digital iD”, should be a mandatory requirement for all online liquor purchases. This technology creates a digital identification and allows users to prove their age at the point of purchasing alcohol. The current age verification requirement at the point-of-sale of simply entering a date-of-birth is inadequate and is open to falsification. Similarly, the use of credit/debit cards to purchase alcohol can’t be relied upon as effective proof of age as minors can obtain these from 14 years of age.

As discussed previously, a person responsible for the delivery of alcohol may be absolved from supply legislation if they did not know, and could not reasonably be expected to have known, they were committing the offence. To mitigate this loophole, it is recommended that any package containing alcohol be required to display a standardised label stating “Contains alcohol: Age verification required upon delivery”. This would alert delivery drivers to the contents of the parcel and advise them of their age verification responsibilities at the point of delivery.

Online businesses offering the delivery of alcohol are not currently held to the same standards imposed on regular licences operating from physical premises, particularly regarding signage. It is recommended that a declaration stating “Delivery will only be completed if a person aged 18 years or over can accept and sign for the goods” and “Delivery will not be made to any person showing signs of intoxication” are required at the point of purchase. In addition, it should be mandated that the pictogram to the left be prominently displayed on the website’s landing page.

The use of buy-now pay-later payment options for the sale of harmful products such as alcohol has the potential to exacerbate addictive behaviours and place vulnerable and at-risk groups further in debt. It is strongly recommended that these payment options are prohibited for all online sales of alcohol.

Recommendations: 10. Mandate digital age verification using appropriate age gating technology for all online alcohol

purchases11. Require any package containing alcohol to display a standardised label stating ‘Contains Alcohol:

Age Verification Required Upon Delivery’12. Require a point of purchase declaration that delivery will only be completed if a person aged 18

years or over can accept and sign for the goods13. Mandate a point of sale declaration that delivery will not be made to any person showing signs of

intoxication14. Mandate that the website landing page prominently displays the ‘Under 18’ pictogram15. Prohibit buy now, pay-later payment options

Thank you again for the opportunity to comment on this Discussion Paper. Should you require any further clarification regarding our recommendations please do not hesitate to contact Jonathon Noyes, NSLHD Health Promotion, on 02 9462 9568 or jonathon.noyes@health.nsw.gov.au.

Kind regards,

Paul Klarenaar Director NSLHD Health Promotion

Online Liquor Gets Audited

Inconsistent application of the NSW Liquor Act 2007

1 Ο The responsibility and legal defence for the licensee and any person

delivering on their behalf, in relation to the supply of liquor to minors

through the internet or by other communication media as per

Section 114 of the NSW Liquor Act 2007, is overly complex.

Ο Third parties involved in the delivery of liquor are required to have an

in-depth knowledge of their legal responsibilities in regards to the

supply of alcohol to minors under Section 114 (4) of the NSW Liquor

Act 2007, without any mandatory training or the requirement of RSA

certification.

Ο Section 114 (3)(iii) of the NSW Liquor Act 2007 effectively absolves

the licensee of their legal responsibility to ensure alcohol is only

supplied to an adult over 18 years, if the sale is made through an

internet site or delivery is made on a day after the day the order is

taken.

NSLHD Health Promotion Service 1

The Northern Sydney Local Health District’s Health Promotion Online Liquor

Gets Audited (OLGA) project involved:

A review of the relevant sections of the NSW Liquor Act 2007 and Liquor

Regulation 2018

Auditing the supply practices of 504 businesses with no walk-up

packaged liquor licences in NSW i.e. those liquor suppliers with licences

restricted to online and phone ordering, and delivery of alcohol.

The audit aimed to assess the parameters in place to protect young people

under 18 years of age, from purchasing alcohol online and prevent the

supply of alcohol to intoxicated persons.

The following risks/issues were identified and solutions recommended:

Recommendations 1.1 Require online licensed businesses and third party delivery companies to enter into a service

agreement clearly outlining supply legislation (Section 114 (4) of the NSW Liquor Act 2007),

and mandating anyone responsible for the delivery of alcohol to be RSA certified.

1.2 Remove Section 114 (3)(iii) of The Act, thereby prohibiting the option for delivery in

accordance with the customer’s instructions (Authority to Leave), and requiring licensees in

all instances to provide written instructions to the person responsible for the delivery of liquor

to only supply to the adult who placed the order or another adult at those premises.

1.3 Establish an alternative approach to assessing social impact for licences without a

geographically defined local and broader community.

1.4 Implementation of ongoing random compliance audits for online packaged liquor licences,

including signage, extreme discounting and age verification (point of sale & delivery).

62%No signage

&/or age verification

Ο Parameters used to assess social impact during the application process for online packaged

liquor licences are not appropriate due to the lack of a geographically defined community.

Ο 62% of websites were found not following signage and/or age verification conditions required

by their liquor licence.

215Websites reviewed

(supplier website found & alcohol could be purchased)

504Licences audited (NSW Liquor and Gaming

database May, 2018)

Barriers to compliance auditing

2 Ο 32% of websites (n=163) were unable to be accessed for the audit.

Ο The proposed URL is not required to be submitted during the liquor

licence application process.

Ο The existing database of packaged liquor licences with no walk-up

conditions does not contain URLs.

Ο There is no requirement in the NSW Liquor Act 2007 to notify the

governing body of URL changes.

Ο Authorities are unable to conduct random compliance audits as

website URLs do not seem to be available.

32%URLs Not Found

OLGA - Online Liquor Gets Audited

Ο 15% of audited websites did not include the notice, ‘Liquor Act 2007: “It

is against the law to sell or supply alcohol to, or obtain alcohol on

behalf of, a person under the age of 18 years’, as required by Section

51(1) of the Liquor Regulation 2018.

Ο Many internet sites, that did include the notice stipulated in Section 51

(1) of the Liquor Regulation 2018, displayed it in a size and location that

would not ensure that a person accessing the site would reasonably be

expected to be alerted to its contents.

Ο Only 21% of audited websites specified that delivery can only be

completed if someone 18+ years can accept the goods.

Ο Only 5% of audited websites included a policy in their Terms and

Conditions on delivery to intoxicated persons.

Absence of consistent mandatory signage

3

21%18+ Required for Delivery

NSLHD Health Promotion Service 2

Recommendations 2.1 Require licensees to supply the governing body with URLs and/or App

name within 30 days from commencement of trading.

2.2 Require licensees to complete an Update details of liquor licence form

when the URL of approved online packaged liquor licence changes.

Recommendations 3.1 Mandate that the website landing page prominently displays the

‘Under 18’ pictogram (on right) and require users to declare their

date of birth to permit access to the site, as well as at the point of

purchase.

3.2 Require a point of purchase declaration that delivery will only be

made if a person aged 18 years or over can accept and sign for the

goods.

3.3 Mandate a point of sale declaration that delivery of goods will not be

made to intoxicated persons.

2019

NSLHD Health Promotion Service nslhd-healthpromotion@health.nsw.gov.au

nshealthpromotion.com.au | twitter.com/nshealthprom

OLGA - Online Liquor Gets Audited

Lack of risk mitigation strategies

4 Ο An absence of effective proof of age check exists:

– 60% of websites did not require the purchaser to declare their DOB

or declare they are 18 years or over.

– Debit cards can be obtained from minors so these can not be

relied upon as proof of age (78% of websites allow credit card/

debit card payment options).

Ο The Responsible Service of Alcohol (RSA) requirements in the NSW Liquor

Act 2007 are unclear for supply of alcohol via online or phone ordering.

60%D.O.B.

Not Required

Recommendations 4.1 Require any package containing alcohol to display ‘Contains Alcohol:

Age Verification Required Upon Delivery’ label, to ensure persons

responsible for delivery are aware of their supply responsibilities.

4.2 Prohibit ‘authority to leave’ delivery option and mandate age

verification for anyone that looks under 25 years at the point of delivery,

as per standard RSA requirements.

4.3 Prohibit buy now, pay-later payment options.

4.4 Restrict the delivery of alcohol to standard trading hours as per

conditions assigned to regular packaged liquor licences (ie. Goods

must be physically delivered between 5am and 11pm, Monday to

Saturday, and 10am to 10pm on Sunday).