Shoprite cannot sell wine on shelves in Eastern Cape

By a narrow majority, the Constitutional Court on Tuesday decided that a licence to sell wine alongside other groceries was “property” in terms of the Constitution.The finding was cold comfort for Shoprite Checkers, which lost the case and will not be able to sell wine on its shelves in the Eastern Cape. But the judgment breaks new ground on the Constitution’s property rights — an emotive and highly contested subject.

The 2003 Eastern Cape Liquor Act did away with grocers’ wine licences, which entitled retail grocers to sell wine on their shelves next to food.

The act said they had to apply for a new type of licence, which would allow them to sell all alcohol, but on separate premises. They were given 10 years to make the transition, during which time they could carry on as before.

Shoprite Checkers predicted that the closure of 27 of its table-wine sections — as envisaged by the act — would lead to a loss of about R40m in sales a year and would impact negatively on its business and marketing strategy.

While the Constitutional Court found that the licence amounted to property, the grocer lost its case because the court decided it had not been “arbitrarily deprived” of the property — a further requirement for constitutional protection.

The issue of whether licences confer property rights on their holders is contested worldwide.

In the main judgment, Justice Johan Froneman said SA’s constitutional property rights had to be determined “within the normative framework of the fundamental values and individual rights in the Constitution”.

The property clause should not “become an obstacle to the transformation of our society, but central to its achievement,” said Justice Froneman.

Shoprite Checkers may have a harder time persuading a court that a grocer’s wine licence was essential to a dignified life, he said. But it was not “too difficult to imagine” that an individual grocer might find it difficult to run her business without being able to sell wine on her shelves, he said.

The licence was already “close to recognition” as property on conventional private law grounds, said Justice Froneman.

“The potential objective link to constitutionally sanctioned self-fulfilment only strengthens the case for recognition of it as property.”

However, while the licence was property, Shoprite-Checkers had not been arbitrarily deprived of it, said Justice Froneman.

He said the change in the regulatory regime did not extinguish any fundamental rights or constitutional values. If the change was rational in law, this would be enough to avoid a finding of arbitrariness.

Opinion may be divided on whether separating alcohol from groceries meant more control over the sale of liquor and whether children were worse off one way or another.

“But these differences of opinion are not the kind of issues courts should interfere with too readily,” he said.

While agreeing with Justice Froneman’s order, Deputy Chief Justice Dikgang Moseneke, with four of his colleagues concurring, disagreed that the grocer’s wine licence was property.

Justice Mbuyiseli Madlanga wrote a dissenting judgment — with Acting Justice Zukisa Tshiqi concurring — saying the licence was both property and that Shoprite Checkers had been arbitrarily deprived of it.

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BY FRANNY RABKIN, 01 JULY 2015, 07:03