How To Get a Western Cape Liquor Licence

Liquor Law Practitioner Antoinette van Dalen answers our questions about the notoriously slow to obtain, South African Liquor Licence.

What should a new restaurant/bar owner know before signing a lease or buying a property with the intention of selling alcohol?

A new liquor licence will only be issued if the property is correctly zoned. The lessee or buyer should therefore ensure that the property is zoned for the anticipated activities and the sale of liquor before they sign any Lease agreement or Deed of Sale.  This can be done by contacting the Planning Department of the Municipality concerned.

If there is already an existing liquor licence on the property, the lessee or buyer should also:

(a) Ask for a copy of the latest renewal form  (Form 21A) and proof of payment thereof to ensure that the licence is still valid and that the seller of the licensed business is indeed the licensee;

(b) Contact the local Liquor Officer to ensure that the licence is not burdened with any infringements.

What steps should restaurant/bar owners take in order to obtain a liquor licence?

They need to apply for the (correct kind of) licence at the Western Cape Liquor Authority by submitting a formal application in terms of Section 36(1) of the Liquor Act (4 of 2008) as amended.

The application process is very technical and complicated and I recommend that new applicants contact a liquor consultant to assist them with the drafting and lodgement of such an application.

If they want to draft the application themselves, I recommend that they contact the Western Cape Liquor Authority at 021 – 204 9700 before they attempt to do so.

What information should they have before making an appointment with a Liquor Licence Law expert/consultant?

They don’t need to make an appointment.  They can contact the liquor consultant telephonically or via email.

 They should know exactly:

(a) What the layout of the proposed premises is going to be (in other words the plans should be finalised);

(b) The type of business they want to conduct on the premises (including the activities they want to allow on the proposed premises); and

(c) If the premises is properly zoned for those activities and the sale of liquor.

The consultant will send the applicant a list of the information and documents needed for the application.

What are the common pitfalls restaurant and bar owners experience when applying for a licence?

The biggest pitfall is time. It is a lengthy process and applicants have to pay their monthly lease/bond and sometimes also operating costs while waiting for the consideration of their applications. I therefore recommend that the applicants inquire about the proficiency and success rate of their consultant.

The costs of a new liquor licence goes further than just the application fees. The applicant must also pay the monthly cost of the business and premises for the duration of the application process. If an applicant makes use of a consultant who lodges an incomplete application, the process will be delayed, which will definitely have an adverse (financial) effect on the applicant.

How long does the process take? Are there ways to speed it up?

An application for a new liquor licence is a lengthy process.    

The prescribed procedure does not allow much space to speed up the process. The applications are lodged on the last Friday of the month where after the Liquor Authority has to advertise it in the Provincial Gazette and newspaper and allow the public access to the application for a period of 28 days after the notice of lodgement of the application has been published.

The designated liquor officer and municipality must lodge their report and comments within 35 days from the date of publication and the applicant has 42 days from the date of publication to replicate to any negative comments by the Liquor Officer or public.

It should be noted that the Liquor Licensing Tribunal will not consider an application while the report by the Liquor Officer or comments by the Municipality is outstanding.

The most common causes for a delayed process are:

(a) Incomplete application

(b) Objections by the public, Liquor Officer or Municipality

(c) Outstanding report by Liquor Officer

(d) Outstanding comments by Municipality

If the Liquor Officer or the public is negative the Liquor Licensing Tribunal can postpone the application for a hearing which will delay the process even more.

Costs involved?

The costs vary and mostly depends on the consultant fees.  

The fees payable to the Liquor Authority are currently as follows:

• Application fee:                                            R 1 745-00
• Issuing / Licence fee:                                   R 2 180-00

Annual renewal fees per annum:

• On consumption licence:                           R 4 360-00
• Off consumption licence:                           R 4 360-00
• On- and Off consumption licence:            R 7 085-00
• Micro-manufacturing licence:                    R 4 360-00

What does the law say about serving liquor while a business owner is waiting for their liquor licence?

“Sell” is defined to include the following “supply, exchange, offer for sale, display for the purpose of sale or authorise, direct or allow a sale, supply, exchange, offer for sale or display for sale”.

“Supply” in relation to liquor, means to place a person in possession or control thereof.

The definition of “sell” is therefore wide enough to include the following actions:

• acceptance of “donations” for liquor supplied to a customer;
• a dinner- or entrance fee that allows the customer to consume liquor for “free”
• a “ticket system” where the customer pays for “a ticket” which allows the customer to consume liquor;
• the “glass system” where the customer pays for the glass and can consume liquor (or taste wine) for “free.”

It is a criminal offence to sell liquor without a licence and the South African Police Service can take steps against such a person and can also close down the business and confiscate the assets.

A provincial liquor licence is required by any person who micro-manufactures liquor or a person who is selling liquor for retail purposes in that particular province:

• a  “micro-manufacurer”  is a person who manufactures liquor at or below the prescribed threshold stipulated in the national Liquor Act (Act 59 of 2003).
• a “retail seller” is a person who is licensed to sell liquor for the purpose of consumption on the licensed premises and/or off the licensed premises;

Does the liquor licence law vary between South African provinces?

Each of the nine provinces has its own provincial Liquor legislation to regulate the micro-manufacturing and retail sale of liquor.

What are the common reasons for a rejected liquor license application?

The most common causes for rejection of liquor applications are the following:

(a) Defects in the application, annexures or process followed; 

(b) If the property is not zoned correctly;

(c) If the applicant is disqualified to be a licensee;

(d) If the Liquor Licensing Tribunal finds the proposed premises as not suitable for the purpose for which it will be used under the licence;

(e) If the activities of the proposed business could have a negative effect on one of the following:

1. the residents of a residential area;
2. the residents of an institution for the aged or frail;
3. the learners of an educational institution who are under the age of eighteen (18) years;
4. the patients of an institution for drug or alcohol related dependencies; or
5. the congregants of a religious institution located in the vicinity of the proposed licensed premises.

(f) If the approval of the application is not in the public interest

Are there different type of liquor licenses to suit the type of business?

The are only 4 kinds of permanent liquor licences in the Western Cape:

(a) Licence for On-consumption  [liquor is consumed on the licensed premises]

(b) Licence for Off-consumption [liquor is removed from the licensed premises and consumed elsewhere]

(c) Licence for on-and off consumption [liquor (permitted for sale) can be consumed on the licensed premises or removed from the licensed premises and consumed elsewhere]

(d) Licence to Micro-manufacture [liquor is manufactured below a prescribed threshold and sold for on- and/or off-consumption purposes. Please note that only the liquor that is manufactured on the licensed premises may be sold under this licence]

It should however be noted that the micro-manufacturing licences issued in terms of the 1989 Liquor Act, does not automatically make provision for the on-consumption sale of liquor.  A micro-manufacturing licence does not allow on-consumption sales, if the licence holder it is not specifically authorised to do so.

For further information, contact Antoinette van Dalen at:

• Email:  avandalen@telkomsa.net
• Cellular:  0825544568 

For a more hands-on approach, you can also visit THE LIQUOR CONSULTANT, a web based program built on a willingness to explore new and unconventional approaches to liquor licensing in the Western Cape. The program uses a combination of legal and programming expertise to support, empower and uplift small business owners by providing a cost effective and hassle-free drafting procedure and assisting applicants who want to lodge their own applications.

Visit the TLC website at:  www.theliquorconsultant.co.za