Liquor law reform

Burns House
Dunedin

I am delighted to have the opportunity to be here today to tell you about the rapid progress we have made this year in the area of liquor policy. I would be happy to engage in a discussion about our approach at the conclusion of my comments.

As you may know, we have made progress on two significant fronts - one within the Parliament and one outside the Parliament.

I introduced the Sale and Supply of Liquor and Liquor Enforcement Bill back on 6 August, and alongside that announced a wider review to be conducted by the Law Commission.

I should say at the outset, that we did not have an opportunity to consider the Bill in the Parliament before the election. In part this reflected the tight programme of work this government needed to progress before the House rose.

But more importantly, it reflected my concern that if we were to send the bill to a select committee so close to an election, it was inevitable that the job would only have just been started. This would have done a disservice to the many potential submitters, who having made submissions would have had to wait some considerable time before that committee was able to reconvene. I want to ensure that there is a continuity of debate and public discussion about this bill because it is an issue of such enormous importance to all of us.

Speaking to you today, some 6 months since speaking at the ALAC conference in Rotorua earlier this year, it is hard to believe that so much has happened in such a short space of time. That speech in April was the first opportunity in my Associate Justice role with responsibility for liquor issues to sound out stakeholders in terms of my own view that there was a need for a first principles review of the Sale of Liquor Act 1989.

There were many reasons why I felt such a review was timely, not the least of which was the enormity of the task of ensuring the legislation was capable of achieving its objectives, in the light of the out-dated conscience vote in Parliament coupled with a looming general election.

I am therefore extremely pleased that this has come to fruition with the Law Commission starting what Sir Geoffrey Palmer has called a ‘root and branch' review of liquor legislation; a review which will be the most significant review since the Laking Working Party of the 1980s.

The Sale and Supply of Liquor and Liquor Enforcement Bill, on the other hand, implements specific proposals arising from three reviews carried out over the past few years and addresses issues that are of immediate concern to the public and which in my view cannot wait for the outcome of the Law Commission review in two and a half years time.

The Bill does three very important things: it allows liquor licensing authorities to take social impact into account when make licensing decisions; it gives communities greater say in liquor licensing decisions by requiring licensing authorities to give effect to local alcohol plans; and it provides the closest this country has come to having a drinking age, making it an offence for adults to supply alcohol to minors without their parents consent.

These are very important steps in putting the power for controlling the availability of liquor where it belongs - in the hands of local communities and parents.

The Bill also tackles some very serious youth issues including a zero alcohol limit for drivers under the age of 20 who don't hold a full licence; repealing the 'reasonable belief' defence for sale or supply of liquor to a minor; and a 'three strikes and you're out' provision for any liquor outlet manager prosecuted for supplying alcohol to minors.

I have been somewhat bemused - and not a little frustrated - by the media coverage of the announcements which in my view has sought to identify a 'victim' of the proposed laws, as if adding a size requirement to grocery stores was the government deciding to prohibit dairies from selling liquor. In 1999 Parliament specifically voted against dairies selling wine and beer. That is the law now. It has been circumvented by convenience stores being granted licences, so I have recommended store size as the means by which we can uphold Parliament's intention. I expect discussion at Select Committee to clarify whether the proposed restriction is the most appropriate criteria to achieve this objective.

But in the meantime, and only this week, the Liquor Licensing Authority has revisited its approach to the granting of licences to these stores. The Woodward Group decision says that the decision to allow a convenience store to be classified as a grocery was a turning point in the off-licence industry. Since that time in 2000, there has been a proliferation in the number of off-licences being granted to convenience stores that have "portrayed their businesses as scaled down supermarkets, when in fact some of them were nothing more than ambitious dairies".

I am thrilled that the Liquor Licensing Authority has essentially written off these earlier decisions, which, as I believed, had inappropriately broadened the scope of the legislative framework. They went so far as to say that the Authority's earlier decisions to issue off-licences to convenience stores were contrary to the correct interpretation of the Act, and should no longer be regarded as good law.

They have described this decision as a ‘line in the sand' decision, which means that no new off-licences will be issued where the business is plainly a convenience store and not a grocery store. They said it was time to return to a principled approach based on what is stated in the relevant section, and not on what commentators might think was intended by Parliament.

I am so pleased that the LLA has taken this stance, because it backs up the conclusion I had reached, but is far more effective than the size of the premises.

Some public commentary on the proposal in the Bill suggested that targeting dairies was punishing the victims of alcohol-related crime - the shopkeepers - rather than the criminals themselves. However these changes are not designed to downplay the personal responsibility of offenders for their actions. Rather, they are directed at meeting community expectations around the availability of alcohol and creating an environment in which alcohol can be enjoyed rather than abused.

Accessibility is an issue, but overwhelmingly, these small stores are the worst offenders when it comes to Controlled Purchase Operations by Police. They sell to under-agers much more often than any other off-licence or on-licence.

The Bill also confirms that grocery stores and supermarkets are to be restricted to selling beer, wine, cider and mead. These stores will no longer be able to try to circumvent the intent of the Sale of Liquor Act by establishing a full liquor store that also sells spirits as a "store within a store" or an immediately adjacent store. I personally thought it was a huge mistake to put beer in supermarkets which is why I voted against it in 1999. No wonder kids think it is an ordinary grocery item as they walk down the stacked shelves of liquor in the supermarkets.

One final myth that I would like to put to rest is that the Bill is nota reaction to the violence in South Auckland. It incorporates decisions made last year around youth issues, and liquor advertising in a report to Damien O'Connor and Mark Burton, concerns raised by Hamilton West MP Martin Gallagher on the purchase age and Manurewa MP George Hawkins whose Bill seeks to give communities greater input into licensing decisions. I have been working on this issue since I was given my delegation in February this year.

Let me now talk about the first principles review of liquor legislation to be led by the Law Commission. Sir Geoffrey Palmer has said that in addition to the inter-departmental expertise it will draw on, it will assemble reference groups of community, industry and other key sectors to assist with the development of options for reform. The Law Commission has been charged with the following five tasks:

1. To examine and evaluate the current laws and policies relating to the sale, supply and consumption of liquor in New Zealand.
2. To formulate a revised policy framework covering the principles that should regulate the sale, supply and consumption of liquor having regard to present and future social conditions and needs.
3. To deal explicitly with a number of issues. For example:

• the responsibility of parents for supervising teenagers who drink;
• the influence of excise tax on alcohol and how pricing policies can minimise harm from alcohol consumption; and
• the advertising of liquor and whether there should be restrictions on discounting alcohol or advertising discounts.

The Commission will prepare and publish an issues paper and engage in extensive public consultation. At the end of this process, the Commission will prepare a final report, including a proposed new policy framework and draft legislation, so that people can judge accurately the precise effects of what is proposed. This broad remit is crucial. We have deliberately set out to ensure ‘nothing is off the table', and that all sectors from producers to sellers to consumers to health groups can be involved.

The most significant aspect of this review is that it will provide Parliament with an evidence base against which to judge the appropriate course to follow. I am confident that this will enable a coherent framework to emerge that balances the interests of the community along with commercial interests. It is important that we get the balance right, because we run the risk of ignoring two very important competing perspectives.

First, there is significant harm caused through alcohol in our society and second well-run, responsible hospitality premises are an important component of our social life and tourism industry. It is a balancing act and I believe we have not yet got that balance quite right.

I have a view as Minister of Commerce that we do not reward good behaviour sufficiently in this regard and I also believe that compliance costs are way too high for those who present a very low risk of harm or whose contribution to overall harm is minimal.

That being said since I spoke at ALAC I went out on the streets of Christchurch with the District Licensing Inspector, Martin Ferguson and the Police Licensing Sergeant, Al Lawn. What an eye opener that was. I am so glad I did it, because I don't believe I would have been able to fully appreciate what people were talking about without actually seeing it for myself.

I guess I do what others do - I remember what it used to be like. I forget that 30 years has gone by since I first could legally purchase wine and beer from a licensed restaurant and 28 years since I could be in a tavern or hotel or bottle store - and I haven't seen the effect on a city where the trading hours are no longer restricted to 11pm closing for bars and 3am for the few nightclubs that were around in those days - and I haven't seen a proliferation of dairies masquerading as convenience stores selling wine and beer at all hours - and I didn't have the in your face advertising of alcohol on television and the supermarket aisles bulging with beer and wine.

I haven't seen a place where one crowd is completely replaced by another crowd at around midnight when my age group goes home and the younger set comes in after tanking up at home first.

What a change that has made. I described the pre and post midnight scene on the Strip as being like a flash-over in a fire, where a convivial atmosphere is replaced by something that doesn't feel safe at all.

And SOL Square where the local Council has been so impressed with the fancy bars and the nightlife it has attracted, without taking into account the blatant breaches of their own liquor ban policy as people walk from venue to venue with bottles in their hands and where there is a lower level of supervision around age than the very tight regimes we saw at other venues. Maybe the councillors haven't seen it after the midnight - I hadn't until then.

I mention this because one of the most significant measures included in the Bill is the proposal which will require licensing agencies to give effect to a council's local alcohol plan. And this is why local councils need to know what's going on.

Local authorities have had the power to introduce by-laws for liquor bans for many years but in other respects they have had to rely on voluntary agreements, which do not always meet the community's expectation of what is reasonable. Giving effect to local alcohol plans where they exist will mean that provisions such as closing hours or ‘one-way door' policies will be able to become conditions of the licences in that area and will be fully enforceable. In Christchurch the one way door policy operates from 4am, which is surprising to those of us who cannot imagine why people need to be out so late, or so early, depending on your perspective.

I have said before that to address issues around alcohol in our communities the full range of stakeholders need to work together. I know that the Chamber of Commerce and every person here can make a positive contribution to both the Bill and Law Commission's review during the consultation processes, however I think it is to the latter that we should look for the step change that will bring about the changes we all know we need.

Thank you. I welcome your questions and comments.