AWRS21100 - The scheme: arranging a sale

A business is considered to be arranging a sale if they are involved in negotiating sales, often in return for a fee or commission without taking ownership of the goods. This includes brokers who do not take physical possession of the alcohol.  The person therefore often acts as an agent for the principal owning the goods and are therefore liable to be registered.

For a person to be considered as arranging a sale, they have to take some action to contact prospective customers and negotiate on behalf of the person selling the goods or take actions to ensure a sale is obtained in order for a person to be considered as arranging a sale. The definition of ‘controlled activity’ (S.98(8) Finance (No.2) Act 2023) was specifically designed to ensure it captures brokers who approach prospective customers with alcohol deals often through fliers or unsolicited phone calls. You should consider all the services a business is providing before deciding whether they are a wholesaler or not.  You should not accept at face value a claim that a business is not a wholesaler because they only arrange delivery of the goods unless they are obviously a haulage company and nothing else.

In considering whether someone is arranging a sale, the following factors should be taken into account:

  • What does the contract say?
  • What does the customer think they are paying for?
  • Is payment received solely for the goods or does it include payment for the service provided?
  • Does your business have the power to negotiate terms and conditions on behalf of another party?
  • Is the broker taking physical possession or ownership of the alcohol? If they do, they are a wholesaler in their own right and therefore need to be approved. However, even if they do not, are they are still arranging a sale and therefore will need to be approved.

This list is not exhaustive and you need to consider all of the business’s activities and not just the details of any contract.

The following are examples of the types of activity which fall under the definition of ‘arranging a sale’:

  • an intermediary who does not take title to the goods and is therefore providing a service and being paid commission rather than buying and selling in their own right
  • a person who acts on behalf of the supplier to find customers
  • a person responsible for bringing two parties together to allow a sale to take place – for example, an auctioneer. This doesn’t apply where the customer is a private individual.

These type of business are not considered to be arranging a sale:

  • an importer who is responsible for accounting for duty only
  • a haulier who only delivers the goods and plays no part in arranging the sale
  • an approved warehousekeeper who is only providing the service of storage of goods and does not have any involvement in the sale.