A bottle of the same soft drink can appear on a restaurant table, in a supermarket basket or in a takeaway order. The product has not changed, but the sales channel can be different. That is what the drinks trade means when it talks about on-trade and off-trade.
For a London venue operator, these terms help make sense of supplier conversations and industry reports. The distinction starts with where the customer intends to consume the drink, rather than its brand, packaging or alcohol content.
The difference at a glance
On-trade means drinks bought for consumption on the premises. Off-trade means drinks bought for consumption elsewhere.
| Point of comparison | On-trade | Off-trade |
|---|---|---|
| Intended place of consumption | On the premises where purchased | Away from the premises where purchased |
| Familiar examples | Pub, restaurant or hotel-bar drinks consumed there | Supermarket, off-licence or online retail purchases consumed elsewhere |
| Example soft-drink sale | A bottle ordered with a restaurant meal | A bottle bought from a shop to take home |
| What the term describes | The consumption channel | The consumption channel |
The Competition Commission used this distinction in its soft-drinks market report, Appendix B. The definitions are useful beyond alcohol: an on-trade conversation might be about mixers, bottled water or juice as well as beer, wine and spirits.
What counts as on-trade?
A drink ordered and consumed in a pub is a straightforward on-trade example. So is a glass of wine with dinner in a restaurant or a soft drink served at a hotel bar.
What connects those examples is the consumption setting. An expensive bottle is not automatically on-trade, and a drink does not become off-trade because it arrives in a sealed can. A customer can buy a canned drink to consume during a meal at a venue.
That makes the term useful when someone describes an “on-trade range” or discusses on-trade customers. It gives context about the intended business channel. It does not, on its own, specify the service arrangement, prices or terms a supplier offers.
What counts as off-trade?
A supermarket wine purchase or a bottle of spirits bought from an off-licence for a gathering at home are familiar off-trade examples. Online consumer retail purchases delivered for consumption elsewhere also fit the distinction.
Here, the important point is that the drink is bought to be consumed away from the selling premises. “Off-trade” does not mean the retailer is outside the hospitality industry’s wider commercial world, nor does it mean the product is a different quality. It identifies the channel through which the consumer buys it.
In both channels, product categories can overlap. Seeing the same brand in a bar and a shop is therefore unsurprising; the term describes the sale rather than assigning that brand permanently to one side.
Can one business operate in both channels?
Yes. The name over the door does not necessarily describe every transaction. The following are hypothetical illustrations of the terminology, rather than statements about any venue’s alcohol permissions.
Example 1: a pub with a takeaway bottle offer. A customer buys a drink and enjoys it at a table in the pub. That is an on-trade sale. Another customer buys a sealed bottle specifically to take home. That second transaction belongs to the off-trade channel. The fact that both purchases happen in a pub does not erase the distinction.
Example 2: a restaurant selling drinks with different orders. A diner orders a soft drink to have with lunch at the restaurant. That is on-trade. Another customer purchases the same soft drink with a takeaway meal to consume elsewhere. That is off-trade. The product and the operator are the same, while the intended consumption setting differs.
These examples show why it helps to ask what activity a description covers. A report might classify a business by its main activity, while a conversation about a particular sale might focus on that transaction.
Where does a drinks wholesaler fit?
A wholesaler supplies business buyers further up the supply chain. It should not be treated simply as an off-trade consumer retailer because goods leave its premises or are delivered to a customer.
The distinction is between the wholesale supply stage and the venue’s eventual sale to its customer. Champers is a drinks wholesaler; that description identifies its commercial role.
For the roles behind a venue’s drinks supply, read What Is a Drinks Wholesaler? Suppliers, Distributors and the Hospitality Supply Chain Explained. For the broader vocabulary, return to Drinks Trade and Hospitality Terms Explained: A Guide for UK Venues.
Frequently asked questions
No. On-trade describes drinks bought for consumption on the premises, including non-alcoholic drinks such as water, juice and soft drinks.
Drinks bought for consumption at a hotel bar are on-trade sales. The description concerns that activity rather than every possible sale made by the hotel.
Consumer retail purchases made online for consumption elsewhere are off-trade. Ordering online does not itself determine the channel: a venue’s wholesale stock order is a separate business supply transaction.
A restaurant can have takeaway activity as well as consumption on the premises. Whether particular alcohol sales are permitted is a separate licensing question.
No. On-trade and off-trade are commercial descriptions. They do not grant alcohol permissions or determine what an individual venue’s licence allows.
Group
