Eastern Cape Liquor Act upheld by the Constitutional Court

Jul 9, 2015 | 2015, News

Shoprite Checkers (Pty) Ltd took the government and the Eastern Cape Liquor Board to Court to challenge the constitutionality of the provisions of the ‘new’ Eastern Cape Liquor Act, introduced in 2004.

According to the Act, commercial trading licenses which allow the selling of wine in grocery stores (‘grocers’ wine licenses’) would lapse 10 years after the commencement of the Act (2014).  Shoprite Checkers would be forced to apply for the standard off-consumption liquor license, entitling them to sell all types of liquor. The question posed before the Constitutional Court was whether grocers’ wine licenses constitute property under Section 25 of the Constitution, and if so, whether the legislative termination of the license would amount to an ‘arbitrary deprivation of property. A novel argument to say the least.

Shoprite Checkers succeeded in the High Court, where it was held that certain provisions of the Eastern Cape Liquor Act were constitutionally invalid. Confirmation of this order was therefore sought in the Constitutional Court.

The Court found that although a grocer’s wine license constitutes property under Section 25 of the Constitution, there was no arbitrary deprivation of this property as Shoprite had an opportunity to convert this license so that it would fall within the ambit of the Eastern Cape Liquor Act, and it chose not to.  In the words of the Court:

 “Objectively viewed, the change in regulatory regime brought about by the Eastern Cape Act did not extinguish any fundamental rights of holders of grocer’s wine licences or fundamental constitutional values. Rationality would thus be sufficient reason to avoid a finding of arbitrariness. And, on the facts on record before us, it is quite rational to change the regulatory regime of liquor sales to provide for simplification in the licensing system.” [at para 83 of Froneman J’s judgment]

 Judgment found at –  http://saflii.org/za/cases/ZACC/2015/23.html

 Incidentally,  the Eastern Cape is the only province that chose to terminate the grocer’s wine license.