So much of an independent wine merchant’s business is now done online, by phone, fax or email, be it selling to consumers or buying in goods from suppliers. On the face of it that sounds straighforward enough, but, as Andrew Park, trade law specialist at App Wine Law explains, there is a whole raft of legislation that retailers need to be on top to make sure they are on top what are termed as “distance sales”.
Here Park goes in to detail about how distance selling works and what steps independent wine merchants must take:
From June 13, 2014 the old regulations governing distance selling were replaced by a new set of regulations (The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013). The official BIS Guidance gives the impression that all this involved was a consolidation of pre-existing rules and requirements.
Not so – the 2013 Regulations place extensive and onerous obligations on all businesses selling goods online or by other distance methods.
Furthermore, from December 13, 2014, distance sellers of wine were burdened by additional requirements under the new EU Labelling Regulation.
Here wine trade law specialist Andrew Park of App Wine Law explains the implications for wine retailers.
What are “distance sales”?
Sales to consumers which are concluded online – or by phone, email, fax or mail order – where the seller and consumer are not physically together at the seller’s business premises.
Who are “consumers”?
Under the 2013 Regulations, “consumer” means an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession. Someone who buys fine wine for investment or speculative purposes, i.e. primarily intending to resell the wine at some point, rather than consume it, is a consumer within this definition, provided this is not his/her trade, business, etc.
Before the consumer is bound by a distance contract, the seller must:
The seller must give the consumer confirmation of the contract, and all the pre-contract information required to be supplied as above, in a durable medium.
Mandatory right to cancel
In all cases (except en primeur or deferred delivery sales) the consumer can cancel the contract within 14 days of receiving the goods. On returning the goods, he/she will be entitled to a full refund of the price and any standard delivery charges paid. The consumer will be liable for return delivery charges only if informed of this before purchase.
Unless agreed otherwise, any goods must be delivered within 30 calendar days.
Passing of risk
Risk in goods will not pass to the consumer until the goods come into the physical possession of the consumer, his nominee for receipt of the goods, or his nominated carrier.
Premium rate telephone lines
A seller must not make the consumer use a premium rate telephone line to make contact about an existing contract.
Under the new regime, obligations are placed on the distance seller as well as the producer. The producer remains responsible for ensuring that the labelling of products meets the mandatory requirements. But now, every distance seller must also ensure that the mandatory information appears on the “material supporting the distance-selling” or “be provided by other appropriate means”. This means on your website, catalogues, mailers, leaflets, product sheets, and so on.
In the case of most wine labels, the mandatory information will be as follows:
These obligations apply to wine placed on the market or labelled after 12th December 2014. For most, therefore, the obligation to comply with the above requirements is not an immediate problem. But it will become increasingly relevant over time.
If you are making online sales via a website, the online sales process must provide all the prescribed information and documentation (a) correctly, and (b) at the right points in time. For many online wine retailers this will mean making major changes to their website and systems.
Distance selling – by phone, email, fax or mail order
Systems and procedures for making sales by phone, email, fax or mail order must also build in the provision of the prescribed information and documentation correctly and at the right point in time.
Non-compliance with the 2013 Regulations involves contractual/commercial risks vis-à-vis your customers:
Local Authorities can apply to court for orders requiring sellers to comply with the 2013 Regulations in the event of persistent and/or serious non-compliance.
Non-compliance with the Labelling Regulation could be a criminal offence. Non-compliant products would have to be withdrawn, and could be confiscated.
Andrew Park is a solicitor and director of APP Wine Law, a dedicated UK wine trade law firm specialising in UK/EU wine agency, distribution, brand development and joint venture work.
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