MEDIA STATEMENT

26 April 2009

Thumbs up for "Trial Balloon" on liquor reform proposals

Labour’s Justice Spokesperson, Lianne Dalziel, has given the thumbs up to what the Law Commission has described as “launching a trial balloon on some of the issues” surrounding the root and branch reform of the law relating to the sale and supply of liquor.

“When I originally formulated the terms of reference for this Law Commission review, I was nervous that powerful liquor and retail interests would dominate the discourse to the detriment of the community and the myriad of agencies that have become increasingly frustrated with the lack of voice they have had," Lianne Dalziel said

"They are the ones who are left to pick up the pieces and to pay a disproportionate amount of the price that is exacted for the harm that is done.

Lianne Dalziel said she was pleased the Law Commission highlighted the fact that alcohol is no ordinary commodity, citing experts that say that it would be classified as a Class B Drug under the Misuse of drugs Act if it were being treated on its merits.

The Law Commission has signaled that harm minimisation should be the prime object of a new legal framework to replace the Sale of Liquor Act 1989 balanced with the need for any regulatory controls to be efficient and effective.

The Commission is considering recommending the new Act be called something like the Alcohol Harm Reduction Act.

"The object of this Act is to establish a system of control over the sale and supply of alcohol to the public and aims to minimise any harm caused by misuse," Lianne Dalziel said.

"It will target reducing effects on health, preventing crime and disorder and the protection of children and youth from alcohol related harms

Lianne Dalziel says the clear statement of objective would align the legislative framework with community expectations and would be welcomed by agencies working on alcohol related harm ranging from health to crime-prevention.

“Naturally the industry has focused on the taxation proposal and the media has focused on the question of age – neither of which are clear-cut issues," Lianne Dalziel said.

"In my submission on the Sale & Supply of Liquor Bill (attached) I have raised the issue of price, because of the practices of supermarkets that include loss-leading and deep discounting making beer and wine available at prices the bottlestores cannot even match in their purchases from their wholesalers.

“Even if we stopped these discounting practices, it would be a step in the right direction. The question about tax is about making everyone who purchases liquor to pay the price for the harm that is done – even if that is caused by the minority. I haven’t formed a view on this, but it is a debate we must have.

“In terms of the age debate, I have made no secret of the fact that I favour a retention of the 18 years for on-licence sales, but I favour a return to 20 years of age for off-licence purchases. This was not an option we considered in 1999, and I regret that it wasn’t on the table for consideration by Parliament as I believe that may have found favour with the majority at the time.

Lianne Dalziel also welcomes the potential return of statutory hours of trade and has submitted to make this a statutory provision rather than leaving hours to be included in Local Alcohol Plans as envisaged by the bill currently before the select committee.

“In my submission I have recommended that all off-licences cease at 8pm and on-licences at 1am (except for designated areas where this would become the ‘one-way-door’ requirement, with closing time at 3am).

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1. As the former Minister with responsibility for the Sale & Supply of Liquor & Liquor Enforcement Bill, I wish to make a submission in support of the Bill, while proposing some amendments to strengthen it. I would like the opportunity to make my submission in person. This can be arranged through my Executive assistant, Jo Crilly, on ext. 8209.

2. I have participated in a number of meetings on the issues surrounding this Bill over the past year and have had an article published in the Christchurch Press, which I have attached for your information. As a result I have had very interesting feedback on the concerns that communities have been raising, including protesting against individual licence applications. The expression ‘enough is enough’ sums up the general attitude that I have heard expressed from a variety of communities - who have had enough of the proliferation of outlets - especially off-licences; who have had enough of around-the-clock trading hours; and who have had enough of the intolerable impacts of alcohol abuse on their personal safety on the streets and at home and on their personal property as well.

3. I have raised the question of the role of supermarkets and how they have brought down the price of beer so low that bottlestore operators have told me that they can buy beer more cheaply from their local supermarket than they can from their regular liquor wholesaler. The select committee must focus on all the strategies utilised by the supermarkets as they are publicly deny that they loss-lead on alcohol. They do and they must be stopped, as the low price (of beer in particular) is part of the availability equation - long trading hours coupled with low prices and the alcohol literally pours out through the supermarket doors and into our streets. When the Countdown decision came out in Christchurch last year, the local police were reported as saying:

“There's research that if you mix availability, price and convenience, then the harm goes up quite substantially."

4. I will go through each section of the Bill where I believe the provisions should be strengthened. It is important that the committee keeps the relevant statutory object in mind when considering this Bill. Section 4 of the Sale of Liquor Act states:

o The object of this Act is to establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse, so far as that can be achieved by legislative means.
o The Licensing Authority, every District Licensing Agency, and any Court hearing any appeal against any decision of the Licensing Authority, shall exercise its jurisdiction, powers, and discretions under this Act in the manner that is most likely to promote the object of this Act.

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1) Local alcohol plans – Part 1 – Clauses 4-37

As you know, the Bill allows territorial authorities to adopt "a local alcohol plan". I have emphasised the word allows because it is permissive not mandatory to have a local alcohol plan.

The advantage of this is that it is then over to each Council to decide what is appropriate for the community in consultation with the community. Councils say that they don’t want unnecessary compliance costs imposed on them by central government legislation, which is fair enough, and the consultation requirements would be onerous for councils that did not want specific controls.

The problem though is that this would mean that if a local council decides not to have a local alcohol plan, then the residents would have no say about the social impact of liquor licences being granted in their neighbourhood for example.

I personally think that local alcohol plans should remain voluntary, however that is on two conditions and that is that the Bill is amended to provide for a community’s right to challenge an application for a licence on broader grounds than currently allowed e.g. on social impact grounds, and that certain licensing conditions become statutory conditions (e.g. hours of trading).

The Bill was originally designed to be flexible so that appropriate rules could be based on the nature of the area concerned – e.g. closing times or ‘one-way door policies’ for on-licences will usually be different for the CBD of a city as opposed to a residential neighbourhood. Smaller towns tend not to have any difficulty closing the doors of their outlets much earlier than the big cities. However there is potential for ‘gaming’ between council catchments, so unless cross-council consultation is also required or a regional approach is provided for in certain circumstances, then it would make sense to standardise the requirements in the law.

After consulting quite broadly, I believe there would be a desire to cease all off-licence sales no later than 8.00pm; to impose a 1.00am closing time on all on-licensed premises outside designated areas and in designated areas (e.g. CBD) a one-way-door policy at 1.00am, closing no later than 3.00am. Specific events can always be catered for by way of special licences.

There are essentially three options:

1. Impose standard trading hours by legislation - preferred option;
2. Require trading hours proposals in Local Alcohol Plans to be co-ordinated across neighbouring
council boundaries;
3. Provide the option for Regional Alcohol Plans to be developed

2) An end to circumventing the law – Restrictions on off-licence premises that can sell
liquor - Part 1 clauses 16-18

The existing law allows off-licences to be granted for wine & beer (also cider & mead) to be sold from the following:

(i)Any supermarket having a floor area of at least 1000 square metres (including any separate departments set aside for such foodstuffs as fresh meat, fresh fruit and vegetables, and delicatessen items); or
(ii) Any grocery store, where the Licensing Authority or District Licensing Agency, as the case may be, is satisfied that the principal business of the store is the sale of main order household foodstuff requirements.

I am disappointed that some elements of the media have made this into a more controversial element of the Bill than it is. It is obvious that there are many stores that were granted off-licences that never should have been under the existing definition. Parliament specifically voted against dairies selling liquor in 1999. Last year, the Liquor Licensing Authority, in a series of decisions, made it clear that the “line in the sand” has been drawn in the place where Parliament intended and dairies masquerading as grocery stores will not be getting licences in the future, nor will existing licensees be getting them renewed. So the proposals around size do not actually need to proceed as the LLA has remedied the situation.
My submission is that the Select Committee recommend the removal of the provisions relating to grocery stores altogether. The retail industry cannot take pride in what has obviously been a deliberate attempt to circumvent the rules. In addition we know from Controlled Purchase Operations data that these small stores are much more likely to sell to under-agers than anyone else. We also know that they are likely to be trading at times when people have already consumed a lot of liquor and I have heard workers say how threatened they have felt by intoxicated people, and that being alone in a shop at 3am with an aggressive, boozed customer demanding the sale leaves them with no choice other than to break the law.
Supermarkets as a general rule do not sell to under-age people or to intoxicated people. There is always more than one person on duty and the supermarkets do not want to risk losing their off-licences.
I recommend that the select committee ask the retail industry to provide figures on turnover with relation to alcohol and see that tracked in relation to grocery items. This would provide a real insight into the contribution the retail industry has made to the ready availability of alcohol.
I have attached the front page of the Herald from when the Bill was introduced. The dairy owner (who shouldn’t have had a licence anyway) said he had been running his dairy for 24 years - he had had a liquor licence for 3½ years and it now made up 30% of his turnover - this is an alarming figure when extrapolated across the massive proliferation of off-licences across New Zealand and the impact of beer being sold in supermarkets after the vote in 1999.

Young people and the Sale & Supply of Liquor

Parental Consent - Clause 41; Clause 51 (Amendment to Summary Offences Act)
The current offence of purchasing liquor with the intention of supplying a minor is unenforceable. I fully support making supply the offence, but I believe the provisions would be strengthened if the committee were to strike out the option of implied parental consent. We are talking about young people under18 years of age - of course their parents should have to consent if they are to be supplied with liquor.

Young Drivers – Clauses 55-60
I support the amendment to the Land Transport Act to introduce a zero blood alcohol limit for drivers under 20 years of age who do not hold a full licence. However several people have raised the problems of intoxicated passengers. Most people I have spoken to are surprised that the law does not prohibit open vessels containing liquor in the car. The Select Committee should strengthen this Bill by adding such a prohibition.
Loss leading
I refer members to Section 154A of the Sale of Liquor Act: Promotion of excessive consumption of alcohol:

Every person commits an offence and is liable to a fine not exceeding $5,000 who, being a licensee or manager of licensed premises, does anything in the promotion of the business conducted on the premises, or in the promotion of any event or activity held or conducted on the premises, that is intended or likely to encourage persons on the licensed premises to consume alcohol to an excessive extent.

Section 154A and the preceding heading were inserted, as from 1 December 1999, by section 82 Sale of Liquor Amendment Act 1999 (1999 No 92). I was the MP that moved this amendment during the committee stages of the Bill as it progressed through Parliament. The reason I only applied it to on-licences was because we had not had problems drawn to our attention of these sorts of promotions in off-licences and besides which host responsibility walks out the door with the alcohol when it is sold from an off-licence. It is important to remember that the 1999 Amendment was when beer was added to what supermarkets and grocery stores could sell. The problems of loss-leading and deep discounting really didn’t come to the fore until that occurred. I know many of the officials who work in this area would appreciate the same principle applied to off-licences as s154A applies to on-licences.

In a recent case involving the Halswell (Christchurch) community’s objection to a liquor licence being granted to a supermarket market owner, who wanted a full licence granted for a liquor store separated from the supermarket by a driveway, the LLA had this to say:-
“We believe that the retail initiative known as loss leading (that is advertising and selling goods at less than cost, in order not only to attract customers to the store, but in the process sell more products) needs to be looked at more seriously by licensees. If a licensee uses liquor to loss lead, then he or she is stimulating, and not meeting demand. Where liquor is involved, it is not good enough for a licensee to say (as they do) that they have to continue with this business practice because of competition. Most licensees understand that they are dealing with a drug, and that they have a duty under the Act to help promote the reduction of liquor abuse. In our experience loss leading helps to promote the abuse of liquor. In future, examples of loss leading by an off-licensee will be treated as an indication of lack of suitability.” Barry Gray Ltd LLA Dec No PH 1789/2008
A prohibition on this practice should be explicit in the law and such an amendment would be within the scope of the Bill referencing as it does the need to address the harm that is being done by these practices.

Conclusion

This Bill is clearly an important step in the right direction. This Select Committee should recommend changes to strengthen it and should make further recommendations to highlight to the Law Commission areas that were not within the scope of the Bill.


ENDS

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