And there’s no sign of demand slowing. In Australia, online liquor sales are expected to grow by 27.2 per cent in 2020-21, with annual growth from 2021-26 projected to be 7.9 per cent.
This presents a moral and logistical dilemma for online providers. When a patron has too much to drink at a bar, the bartender can refuse to serve the person any more alcohol, but what happens in the case of home delivery of alcohol?
Tighter laws in NSW
In July, New South Wales became the first Australian state to tighten laws around online alcohol sales to protect minors and people who are intoxicated.
“The changes are an Australian first and ensure there are fit-for-purpose laws for the range of alcohol delivery business models that have emerged – particularly same-day deliveries,” Minister for Digital and Minister for Customer Service Victor Dominello said at the time.
The laws aim to hold providers and delivery people to a similar standard to physical bottle shops. It is now an offence to deliver alcohol to a minor or intoxicated person, whether the delivery is made on the same day or later; to deliver alcohol outside specified same-day delivery hours; and for retailers to fail to provide an avenue online for self-exclusion.
It will take some time before all reforms come into effect, however. From June 2022, same-day delivery providers will be required to undertake online age verification checks for all new customers and have systems in place to verify the identity of regular customers.
Not only will this measure reduce the risk of selling to minors, but it will also protect customers who have signed exclusion orders.
The latest reforms come three years after the death of a 49-year-old Sydney man, who had spent $24,000 on almost 300 orders with online alcohol service Jimmy Brings in the three years prior to his death.
According to the Sydney Morning Herald, no action was taken against Jimmy Brings in relation to the man’s death, however, Liquor and Gaming found there were regulatory loopholes that prompted the introduction of these stronger alcohol delivery laws.
The NSW alcohol regulator is currently investigating whether Jimmy Brings broke responsible service laws in its delivery of alcohol to the man’s home.
Do regulations go far enough?
Rosanna Iacono, managing partner of strategy consultancy The Growth Activists, said it’s clear that protocols for how online businesses exercise duty of care need more attention.
“The fact that in 2018 there were only 500 licences of online sales of liquor in NSW, and that post-Covid there are now more than 3000 holding online liquor licences makes you wonder how rigorous Liquor & Gaming NSW has been in supporting businesses to understand Responsible Service of Alcohol (RSA) principles,” Iacono told Inside Retail.
While she says many alcohol retailers have stepped up their policies significantly in the last 12 months, she questions whether this is just virtue signalling and wonders what is actually happening at checkout.
“The challenge for retailers is to close the gap between intent and concrete actions,” she said.
When it comes to online purchases, Iacono said there is no excuse for not having alerts in place for B2C orders that go beyond what is deemed ‘normal’.
“The data and CRM capabilities that exist for optimising sales can also be utilised to flag irregular consumption patterns,” she said.
With businesses moving towards more rigorous environmental, social and governance (ESG) practices, Iacono notes that part of good social impact practice is “excellent customer stewardship”.
“This goes beyond just having dependable warranties in place and protecting customer data – for businesses that sell products that can have potential detrimental health effects it also means exercising much higher standards of duty of care,” she said.
Andy Miller, co-founder and CEO of non-alcoholic beer brand Heaps Normal, echoed Iacono’s sentiment, saying: “It’s a shame we need to have regulations to tell companies how to operate responsibly.”
Miller said all businesses bear responsibility for ensuring customers have adequate information to make an informed decision about what they consume and that “safety nets are in place to catch those who fall through the cracks”.
“If you genuinely think about this from a community point of view, the responsibility doesn’t only fall on one person. It’s about everyone taking responsibility for their role in looking out for ourselves and others,” Miller told Inside Retail.
“When your goal is harm minimisation, you’re fighting a losing battle. How much harm is acceptable? We can’t regulate our way to zero harm. I think the solution lies in education, open discussion on how we can have a healthy relationship with our vices and in creating strong community support networks for those times when we need an extra hand. That’s what changing drinking culture looks like.”
One area that the NSW government failed to address in its reforms is the use of BNPL services for the purchase of alcohol. With BNPL becoming an increasingly popular payment method for consumers, there are concerns that offering this option for alcohol could enable consumers to fuel an addiction or make purchases that they cannot afford.
“There’s no doubt BNPL services are convenient, but we’ve made a conscious decision at Heaps Normal not to engage these services in our retail channel,” Miller said.
“It might sound old-fashioned, but I truly believe it’s just another way to spend money you don’t have.”
When it comes to better protections for customers online, Miller said businesses need to remember the role that technology should offer in society.
“We constantly remind ourselves that technology should always be at the service of people. Never the other way around. When we find that line being blurred, it’s time to reassess,” he said.