Court says officials wrong to ban supermarket sales of shandy

Cayman authorities were wrong to ban supermarket sales of shandy – but only because the liquor licensing laws were not applied to other drinks with a low alcohol content, a judge has ruled.

The Grand Court’s Justice Jalil Asif ruled that a decision by the government’s Department of Commerce and Investment to block Foster’s Supermarket from selling Banks Shandy, a Barbadian beer and flavoured soda mix that contains 0.9% alcohol by volume, and GT Retail from supplying it, was unfair.

The Department of Commerce and Investment said they would need a liquor licence to be involved in the supply or sale of the drink.

Asif said in a written judgment that kombucha – fermented tea – and Baba Roots, a herbal drink, both contain small amounts of alcohol, but had been allowed to be sold in supermarkets without the need for a liquor licence.

He added, “In my judgment, the DCI’s approach to its decision-making in relation to enforcing the Act in relation to Banks Shandy, while at the same time ignoring or not enforcing the Act in respect of kombucha and Baba Roots is unfair … unreasonable and irrational”.

Asif highlighted that the Attorney General Chambers had said the Department of Commerce and Investment did not have discretion over enforcement of the Liquor Licensing Act because a licence was mandatory under the legislation.

He wrote, “Unless and until Parliament revises the scheme in the Liquor Licensing Act to relax the controls on the sale of low alcohol drinks, drinks of that kind are subject to the full rigour of the Act and cannot be legally sold by those who do not have a liquor licence.”

He was speaking after applicant GT Retail asked for a judicial review of the ban, imposed in 2021, and damages for the loss of stock with the Department of Commerce and Investment and the Liquor Licencing Board as respondents.

Asif’s judgment said, “While I have found in favour of GT Retail in relation to the unfair and irrational application of the Liquor Licensing Act to its sale of Banks Shandy, I do not consider that this is a case where it is appropriate to order that the DCI should pay damages in respect of GT Retail’s wasted stock that it uplifted from Foster’s.

“The reason for this is that I have quashed the DCI’s decision because the DCI was applying the Act unfairly and irrationally by not enforcing it in respect of other alcoholic drinks, not because the Act did not apply to Banks Shandy.

“If the DCI had been applying the Act properly and uniformly, as it should have done, then GT Retail would still not have been able to sell Banks Shandy to Foster’s and Foster’s would still not have been able to sell it to retail customers without a liquor licence.

“Thus, the outcome for GT Retail would not have been any different.”

Asif added that a decision by the Department of Commerce and Investment to ban the sale of the drink, determined on its “proof”, was also wrong.

He said, “First it is clear from the terms of the definition of ‘proof’ … that the concept of ‘proof’ is only relevant to alcoholic drinks produced by distillation.

“There is no suggestion that Banks Shandy is produced by distillation.”

He said the Department of Commerce and Investment’s Leith Bodden, who used the reason to insist on the ban, “therefore applied a criterion in the Act that was inapplicable to the product in question.”

Asif said, “Ms Bodden appears to have understood the reference to the definition of ‘proof’ to 0.5727 as being a percentage, ie, that a drink would have to have less than 0.5727% alcohol by volume to be sold without a liquor licence.

“That is not the meaning of the definition of proof in Section 2 of the Act.

“The absence of a reference to a percentage within the definition indicates that the statements as to the weight and volume of alcohol in the definition are intended to be ratios of the proportion of non-alcoholic liquid to alcohol within the liquor.

“These ratios must range between 0, ie, no alcohol, and 1, ie, 100% alcohol.

“Thus, the reference to 0.5727 of alcohol by volume as a ratio is equivalent to 57.27% alcohol by volume. Ms Bodden therefore applied the criterion incorrectly.”