Sale and Supply of Liquor and Liquor Enforcement Bill

  • discharged on 16 December 2010

Explanatory note

General policy statement

This Bill proposes to amend the Sale of Liquor Act 1989, the Summary Offences Act 1981, and the Land Transport Act 1998, to implement recommendations arising from the Review of the Sale and Supply of Liquor to Minors and the Review of the Sale of Liquor and Liquor Enforcement Issues (the Targeted Review).

The Bill also introduces into the Sale of Liquor Act 1989 a new system of enforced self-regulation of alcohol advertising arising out of the Review of the Regulation of Alcohol Advertising.

Objectives

In seeking to address the drinking behaviours of minors an integrated approach is necessary. Solutions rely on changing the behaviour of individuals and communities. This involves a supportive regulatory environment, public awareness and ownership of issues, understanding of rights and responsibilities, and consistent and effective enforcement. Improving compliance by industry will also make a contribution. The proposals in the Bill are intended to contribute to this change.

Research indicates that parents are the main suppliers of alcohol to minors (60% of minors identify parents as the primary source of supply). Around 30% of supply is by friends and 10 to 15% is purchased from licensed premises by minors themselves. In the context of these findings, the large majority (92%) of parents agree that the primary responsibility for helping teenagers learn how to handle alcohol responsibly belongs to parents.

Common locations where minors consume alcohol are their own home, someone else’s home and public places.

There is also increasing concern regarding the extent of alcohol-related harm, and communities are frustrated by their inability to manage that harm. There is a need to improve local control over where, to whom, when, and how alcohol can be sold in communities, to ensure that social impact is taken into account in licensing conditions.

In this context, the policy objectives of the Bill are to:

  • support a more moderate drinking environment and culture to reduce the normalisation of youth drinking:

  • enhance the responsibility of friends and adults who supply alcohol to minors:

  • increase youth responsibility and accountability; and

  • improve compliance and responsibility of industry; and

  • increase community input into licensing decisions; and

  • clarify the types of premises that may hold off-licences.

Amendments to Land Transport Act 1998

Inexperienced drivers are particularly at risk of alcohol-related crashes. These proposals aim to make it clear to young, inexperienced drivers that alcohol and driving do not mix. So there can be no doubt, drivers aged under 20 years who do not have a full licence will have an alcohol limit of zero.

Enforced self-regulation of alcohol advertising

A review of the current voluntary self-regulatory system for alcohol advertising found a small but significant association between the level of exposure to alcohol advertising and alcohol consumption. The review recommended improvements to move to a system of enforced self-regulation. This Bill proposes a new legislative system that outlines the public policy goals of the proposed system, roles of the responsible body, and offences and sanctions.

The policy objectives are to:

  • ensure that alcohol advertising is not inconsistent with the promotion of responsibility and moderation in liquor consumption; and

  • minimise overall exposure to alcohol advertising to children and young people under the minimum legal purchasing age; and

  • ensure that alcohol advertising does not hold strong appeal to minors.

Clause by clause analysis

This Bill is an omnibus Bill, making to 3 Acts amendments relating to liquor.

Part 1 amends the Sale of Liquor Act 1989, Part 2 the Summary Offences Act 1981, and Part 3 the Land Transport Act 1998; and it is intended that at the Committee of the Whole House stage of the Bill, it will be split into a Sale of Liquor Amendment Bill, a Summary Offences Amendment Bill, and a Land Transport Amendment Bill.

Clause 1 states the Bill’s title.

Clause 2 relates to the Bill’s commencement. It provides that—

  • Part 1 (the amendments to the Sale of Liquor Act 1989) come into force on a date appointed by Order in Council:

  • Part 3 (the amendments to the Land Transport Act 1998) comes into force 6 months after assent:

  • the rest of the Bill (the amendments to the Summary Offences Act 1981, and certain formal provisions) comes into force on the day after assent.

Clause 3 states the Bill's purpose, which is to make to the Sale of Liquor Act 1989, the Summary Offences Act 1981, and the Land Transport Act 1998, amendments that—

  • reduce the opportunity for society and individuals to be harmed by the misuse or excessive consumption of alcohol; or

  • deter people from undertaking behaviour related to alcohol that is likely to result in the harming of society or individuals by its misuse or excessive consumption; or

  • increase community input into licensing decisions; or

  • have 2 or more of those effects.

Part 1
Amendments to Sale of Liquor Act 1989

Clause 4 provides that the principal Act amended by clauses 5 to 24 is the Sale of Liquor Act 1989.

Clause 5 inserts 8 new definitions into section 2 of the principal Act.

Five relate to the new provisions about advertising proposed to be inserted into the principal Act by clause 35, and are definitions of—

  • cease and desist order, which is a notice under proposed new section 136C; and

  • LAAB, which is the liquor advertising advisory body recognised under proposed new section 136B; and

  • liquor advertisement; and

  • liquor product; and

  • liquor promotion.

Two (applicable local alcohol plan and local alcohol plan) relate to the new provisions about local alcohol plans.

The other definition is of shop.

Amendments relating to on-licences

Clause 6 amends section 9 of the principal Act, which relates to applications for on-licences, by inserting a new subsection (4A) requiring an applicant for an on-licence to notify the District Licensing Agency of the publications in which the public notice of the application will be given, and the day or days on which the notice will be given.

Clause 7 amends section 12 of the principal Act, which at present provides for the District Licensing Agency to grant all unopposed applications for on-licences, and forward opposed applications to the Licensing Authority.

In future—

  • unopposed applications will have to be forwarded to the Authority if the Agency thinks them inconsistent with a local alcohol plan; and

  • the Agency will have to impose conditions on on-licences it grants (even if the application for the licence is unopposed) if it thinks that granting the licence without the conditions would be inconsistent with the plan.

Clause 8 amends section 13 of the principal Act, which states matters to which regard must be had when an application for an on-licence is being considered.

The Licensing Authority must have regard to any local alcohol plan, and must not grant an on-licence if—

  • there is an applicable local alcohol plan; and

  • it thinks that granting the licence would be inconsistent with the plan; and

  • the local authority has not notified the Authority that it supports the granting of the licence.

The Licensing Authority must impose conditions on any on-licence it grants if—

  • there is an applicable local alcohol plan; and

  • it thinks that granting the licence without the conditions would be inconsistent with the plan.

Clause 9 amends section 14 of the principal Act, which states the conditions imposed on on-licences, so that the Licensing Authority and District Licensing Agency may impose on on-licences conditions provided for in an applicable local alcohol plan.

Clause 10 amends section 16 of the principal Act, which provides for the variation of conditions imposed on on-licences.

A new subsection (8) is added, to the effect that the Licensing Authority or District Licensing Agency must not vary any conditions imposed on an on-licence if—

  • the conditions are provided for in an applicable local alcohol plan; and

  • holding an on-licence, or the consequences of holding an on-licence, that is subject to the conditions as varied would be inconsistent with the plan.

Clause 11 amends section 18 of the principal Act, which relates to the renewal of on-licences, by inserting a new subsection (3A) requiring an applicant for the renewal of an on-licence to notify the District Licensing Agency of the publications in which the public notice of the application will be given, and the day or days on which the notice will be given.

Clause 12 amends section 21 of the principal Act, which at present provides for the District Licensing Agency to grant all unopposed applications for renewal of an on-licence, and forward opposed applications to the Licensing Authority.

In future—

  • unopposed applications will have to be forwarded to the Licensing Authority if the District Licensing Agency thinks them inconsistent with a local alcohol plan; and

  • the District Licensing Agency will have to impose conditions on on-licences it renews (even if the application for the renewal is unopposed) if it thinks that renewing the licence without the conditions would be inconsistent with the plan.

Clause 13 amends section 22 of the principal Act, which states matters to which regard must be had when an application for the renewal of an on-licence is being considered.

The Licensing Authority must have regard to any local alcohol plan, and must not renew an on-licence if—

  • there is an applicable local alcohol plan; and

  • it thinks that renewing the licence would be inconsistent with the plan; and

  • the local authority has not notified the Authority that it supports the renewal of the licence.

The Licensing Authority must impose conditions on any on-licence it renews if—

  • there is an applicable local alcohol plan; and

  • it thinks that renewing the licence without imposing the conditions would be inconsistent with the plan.

These requirements are, however, subject to the transitional arrangements provided for in proposed new section 255.

Amendments relating to off-licences

Clause 14 amends section 31 of the principal Act, which relates to applications for off-licences, by inserting a new subsection (3A) requiring an applicant for an off-licence to notify the District Licensing Agency of the publications in which the public notice of the application will be given, and the day or days on the notice will be given.

Clause 15 amends section 34 of the principal Act, which at present provides for the District Licensing Agency to grant all unopposed applications for an on-licence, and forward opposed applications to the Licensing Authority.

In future—

  • applications relating to groceries with an area under 150 m2 will have to be dealt with by the Authority, even if they are unopposed; and

  • unopposed applications will have to be forwarded to the Authority if the Agency thinks them inconsistent with a local alcohol plan; and

  • the Agency will have to impose conditions on on-licences it renews (even if the application for the renewal is unopposed) if it thinks that renewing the licence without the conditions would be inconsistent with the plan.

Clause 16 amends section 35 of the principal Act, which states matters to which regard must be had when an application for an off-licence is being considered.

The Licensing Authority must have regard to any local alcohol plan, and must not grant an off-licence if—

  • there is an applicable local alcohol plan; and

  • in its opinion, granting the licence, or the consequences of granting the licence, would be inconsistent with the plan; and

  • the local authority has not notified the Authority that it supports the granting of the licence.

Also, the Licensing Authority must not grant an off-licence in respect of any premises situated within a shop other than a supermarket, or a grocery store with a floor area of at least 150 m2. This will not prevent the granting of an off-licence in respect of any premises situated within such a shop; but, by virtue of the amendments proposed to be made to section 37 of the principal Act by clause 18, they will be limited to selling wine, fruit wine, mead, and beer.

Both the Licensing Authority and District Licensing Agency must impose conditions on any off-licence it grants if—

  • there is an applicable local alcohol plan; and

  • granting the licence, or the consequences of granting the licence, without those conditions would be inconsistent with the plan.

Clause 17 amends section 36 of the principal Act, which relates to the types of premises in respect of which off-licences may be granted, so as to restrict the ability of groceries with a floor area of less than 150 m2 to obtain off-licences.

These smaller groceries will now not be able to be granted an off-licence unless the Licensing Authority (which, by virtue of the amendment proposed to be made by clause 15, will have to consider every application relating to a grocery of this size, even if it is unopposed) is satisfied that—

  • the principal business of the grocery is the sale of main order household foodstuff requirements; and

  • there is not within 10 km of the grocery a supermarket with a floor area of 1 000 m2 or more, or premises whose principal business is the manufacture or sale of liquor; and

  • it would not be economic to establish within 10 km of the grocery a supermarket with a floor area of 1 000 2 or more, or premises whose principal business is the manufacture or sale of liquor.

Clause 18 makes several amendments to section 37 of the principal Act, which states the conditions of off-licences.

New subsections (3B) to (3D) are inserted.

New subsection (3B) restricts the range of liquor that may be sold in premises with an off-licence that are within a shop, or adjacent to a supermarket and under the same management as the supermarket, to what may be sold by a supermarket—wine, fruit wine, mead, and beer.

New subsection (3C) defines certain terms used in new subsection (3B).

New subsection (3D) imposes on every off-licence granted in respect of premises in which the principal business is the manufacture or sale of liquor the condition that its principal business continues to be the manufacture or sale of liquor.

The other amendments are consequential on the amendments to section 36 of the principal Act proposed to be made by clause 17.

Clause 19 amends section 39 of the principal Act, which provides for the variation of conditions imposed on off-licences

A new subsection (8) is added, to the effect that the District Licensing Agency or Licensing Authority must not vary any conditions imposed on an off-licence if—

  • the conditions are provided for in an applicable local alcohol plan; and

  • holding an on-licence, or the consequences of holding an on-licence, that is subject to the conditions as varied would be inconsistent with the plan.

Clause 20 amends section 41 of the principal Act, which relates to the renewal of off-licences, by inserting a new subsection (3A) requiring an applicant for the renewal of an off-licence to notify the District Licensing Agency of the publications in which the public notice of the application will be given, and the day or days on which the notice will be given.

Clause 21 amends section 44 of the principal Act, which at present provides for the District Licensing Agency to grant all unopposed applications for renewal of an off-licence, and forward opposed applications to the Licensing Authority.

In future—

  • applications relating to groceries with an area under 150 m2 will have to be dealt with by the Authority, even if they are unopposed; and

  • unopposed applications will have to be forwarded to the Authority if the Agency thinks them inconsistent with a local alcohol plan; and

  • the Agency will have to impose conditions on off-licences it renews (even if the application for the renewal is unopposed) if it thinks that renewing the licence without the conditions would be inconsistent with the plan.

Clause 22 amends section 45 of the principal Act, which states the criteria for the renewal of off-licences, so that in future the District Licensing Agency and Licensing Authority—

  • must consider whether the premises in respect of which a renewal has been applied for are situated within a shop, or are premises of a kind described in section 36(1)(d) or new section 36(1A); and

  • must refuse to renew the licence if they are premises of a kind in respect of which it will no longer be possible to grant an off-licence.

The District Licensing Agency must also have regard to any local alcohol plan, and must not renew an off-licence if—

  • there is an applicable local alcohol plan; and

  • in its opinion, renewing the licence, or the consequences of renewing the licence, would be inconsistent with the plan.

The Licensing Authority must also have regard to any local alcohol plan, and must not renew an off-licence if—

  • there is an applicable local alcohol plan; and

  • in its opinion, renewing the licence, or the consequences of renewing the licence, would be inconsistent with the plan; and

  • the local authority has not notified the Authority that it supports the renewal of the licence.

Both the Licensing Authority and District Licensing Agency must impose conditions on any off-licence it renews if—

  • there is an applicable local alcohol plan; and

  • renewing the licence, or the consequences of renewing the licence, without imposing those conditions would be inconsistent with the plan.

These requirements are, however, subject to the transitional arrangements provided for in proposed new section 256.

Amendments relating to club licences

Clause 23 amends section 55 of the principal Act, which relates to applications for club licences, by inserting a new subsection (3A) requiring an applicant for a club licence to notify the District Licensing Agency of the publications in which the public notice of the application will be given, and the day or days on which the notice will be given.

Clause 24 amends section 58 of the principal Act, which at present provides for the District Licensing Agency to grant all unopposed applications for a club licence, and forward opposed applications to the Licensing Authority.

In future—

  • unopposed applications will have to be forwarded to the Authority if the Agency thinks them inconsistent with a local alcohol plan; and

  • the Agency will have to impose conditions on club licences it renews (even if the application for the renewal is unopposed) if it thinks that renewing the licence without the conditions would be inconsistent with the plan.

Clause 25 amends section 59 of the principal Act, which states matters to which regard must be had when an application for a club licence is being considered.

The Licensing Authority must have regard to any local alcohol plan, and must not grant a club licence if—

  • there is an applicable local alcohol plan; and

  • it thinks that granting the licence would be inconsistent with the plan; and

  • the local authority has not notified the Authority that it supports the granting of the licence.

The Licensing Authority must impose conditions on any club licence it grants if—

  • there is an applicable local alcohol plan; and

  • it thinks that granting the licence without the conditions would be inconsistent with the plan.

Clause 26 amends section 60 of the principal Act, which states the conditions imposed on club licences, so that the Licensing Authority and District Licensing Agency may impose on club licences conditions provided for in an applicable local alcohol plan.

Clause 27 amends section 62 of the principal Act, which provides for the variation of conditions imposed on club licences.

A new subsection (8) is added, to the effect that the Licensing Authority or District Licensing Agency must not vary any conditions imposed on a club licence if—

  • the conditions are provided for in an applicable local alcohol plan; and

  • holding a club licence, or the consequences of holding a club licence, that is subject to the conditions as varied would be inconsistent with the plan.

Clause 28 amends section 64 of the principal Act, which relates to the renewal of club licences, by inserting a new subsection (3A) requiring an applicant for the renewal of a club licence to notify the District Licensing Agency of the publications in which the public notice of the application will be given, and the day or days on which the notice will be given.

Clause 29 amends section 67 of the principal Act, which at present provides for the District Licensing Agency to grant all unopposed applications for renewal of a club licence, and forward opposed applications to the Licensing Authority.

In future—

  • unopposed applications will have to be forwarded to the Authority if the Agency thinks them inconsistent with a local alcohol plan; and

  • the Agency will have to impose conditions on club licences it renews (even if the application for the renewal is unopposed) if it thinks that renewing the licence without the conditions would be inconsistent with the plan.

Clause 30 amends section 68 of the principal Act, which states the criteria for the renewal of club licences.

The Licensing Authority must have regard to any local alcohol plan, and must not renew a club licence if—

  • there is an applicable local alcohol plan; and

  • it thinks that renewing the licence would be inconsistent with the plan; and

  • the local authority has not notified the Authority that it supports the renewal of the licence.

The Licensing Authority must impose conditions on any club licence it renews if—

  • there is an applicable local alcohol plan; and

  • it thinks that renewing the licence without imposing the conditions would be inconsistent with the plan.

These requirements are, however, subject to the transitional arrangements provided for in proposed new section 257.

Amendments relating to special licences

Clause 31 inserts into the principal Act a new section 78A requiring the District Licensing Agency (which at present handles all applications for special licences)—

  • to forward applications for decision by the Licensing Authority if the Agency thinks them inconsistent with a local alcohol plan; and

  • to impose conditions on special licences it renews if it thinks that renewing the licence without the conditions would be inconsistent with a local alcohol plan.

Clause 32 amends section 79 of the principal Act, which states matters to which regard must be had when an application for a special licence is being considered.

The Licensing Authority must have regard to any local alcohol plan, and must not grant a special licence if—

  • there is an applicable local alcohol plan; and

  • in its opinion, granting the licence, or the consequences of granting the licence, would be inconsistent with the plan; and

  • the local authority has not notified the Authority that it supports the granting of the licence.

Both the Licensing Authority and District Licensing Agency must impose conditions on any special licence it grants if—

  • there is an applicable local alcohol plan; and

  • granting the licence, or the consequences of granting the licence, without those conditions would be inconsistent with the plan.

Clause 32 amends section 79 of the principal Act to reflect the fact that the Licensing Authority will now be handling certain applications for a special licence forwarded to it by the District Licensing Agency.

Clause 33 amends section 80 of the principal Act, which states the conditions imposed on special licences, so that the Licensing Authority and District Licensing Agency may impose on special licences conditions provided for in an applicable local alcohol plan.

Clause 34 amends section 82 of the principal Act to reflect the fact that the Licensing Authority will now be handling certain applications for a special licence forwarded to it by the District Licensing Agency.

Clause 35 amends section 83 of the principal Act to reflect the fact that the Licensing Authority will now be handling certain applications for a special licence forwarded to it by the District Licensing Agency.

Clause 36 amends section 84 of the principal Act to reflect the fact that the Licensing Authority will now be handling certain applications for a special licence forwarded to it by the District Licensing Agency.

Local alcohol plans

Clause 37 inserts into the principal Act a new Part 4A providing for local alcohol plans.

New section 84A empowers any territorial authority to adopt, amend, or revoke a plan relating to the sale or consumption of alcohol within its district, or any part or parts of its district (a local alcohol plan).

A local alcohol plan can be adopted (or amended or revoked) only by using the special consultative procedure provided for in the Local Government Act 2002.

New section 84B states that a local alcohol plan may include requirements relating to any or all of the following matters (in relation to outlets for the sale of liquor generally, outlets for the sale of liquor holding a licence of any particular kind, or both):

  • the hours during which liquor may be sold:

  • where outlets may be located:

  • a maximum density for outlets:

  • a minimum distance outlets must be from—

    • particular community premises; or

    • community premises of any particular kind:

  • responsible business practices and event management:

  • information to be submitted with applications for the granting or renewal of a licence:

  • the submission of social impact reports with applications for the granting or renewal of licences:

  • the matters to be contained in social impact reports:

  • the persons by whom social impact reports are to be prepared:

  • conditions that are to be or may be imposed on licences:

  • criteria to be used in assessing applications for the granting or renewal of licences:

  • a policy on how any criteria or conditions in the plan are to be applied to applications for the granting or renewal of licences.

Any policy stated may include a statement of circumstances in which applications for licences are to be granted or refused.

New section 84C defines community premises, district, outlet, special consultative procedure, and territorial authority.

Amendment relating to management of licensed premises

Clause 38 inserts into the principal Act 3 new sections putting into effect a three strikes and you’re out policy for managers who have 3 adverse findings relating to people under 18 (young people) made against them within 2 years. It will have the effect of preventing them from being a manager, temporary manager, or acting manager for 5 years after the third conviction.

New section 135A provides for a member of the police or an inspector to apply to the Licensing Authority for an order cancelling a manager’s certificate.

The only grounds on which an application can be made are that—

  • during the 6 months before the application is made,—

    • the manager has been convicted of an offence, committed after the commencement of the section, relating to selling or supplying liquor to a young person or allowing a young person to enter a restricted or supervised area on licensed premises; or

    • the Licensing Authority has found that the manager has, after the commencement of the section, sold or supplied liquor to a young person or allowed a young person to enter a restricted or supervised area on licensed premises; and

  • at least 2 other similar convictions or findings have been made against the manager (after the commencement of the section) in respect of incidents occurring during the 2 years before the day on which the latest conviction or finding occurred.

If satisfied that those grounds have been established, the Licensing Authority must cancel the certificate.

New section 135B relates to the procedure for applications under new section 135A.

Applications must be made to the Licensing Authority, in the form and manner prescribed for applications under section 135 for an order suspending or cancelling a manager’s certificate.

The Secretary of the Licensing Authority must—

  • send a copy of the application to the manager, and the licensee of the licensed premises in relation to which the latest conviction occurred; and

  • fix the earliest practicable date for a public hearing of the application; and

  • give at least 10 working days’ notice of the hearing to the applicant and manager.

The applicant and the manager can appear and be heard at the hearing (personally or by counsel) and call, examine, and cross-examine witnesses; but evidence and submissions must be limited to whether it can be established that 3 findings have been made against the manager in 2 years.

Any cancellation of a manager’s certificate takes effect immediately.

New section 135C applies to a person whose manager’s certificate has been cancelled under new section 135A(5) if less than 5 years has passed since the latest of the convictions on the grounds of which it was cancelled, and provides that—

  • a manager’s certificate must not be issued, and an application for a licence must not be granted, to him or her:

  • he or she must not be appointed as a temporary manager or an acting manager:

  • any purported appointment as a temporary manager or an acting manager is void (whether or not the licensee concerned knows that the section applies to him or her).

Advertising and promotions

Clause 39 inserts a new Part 6A into the principal Act. The Part contains new sections 136A to 136G.

New section 136A states principles for the purposes of the Part. They are that—

  • liquor advertising and liquor promotion should not be inconsistent with the promotion of responsibility and moderation in the consumption of alcohol; and

  • the overall exposure of children and people under the age of 18 years to liquor advertising and liquor promotion should be minimised; and

  • liquor advertising and liquor promotion should not hold strong appeal to children or young people.

New section 136B empowers the Ministers of Justice and Health to recognise any body corporate for the purpose of—

  • developing and reviewing codes (for liquor advertising and liquor promotion); and

  • when reviewing its codes, devising appropriate ways of engaging with the community to elicit a range of views on them; and

  • administering a complaints process; and

  • referring to any relevant agency complaints outside its jurisdiction; and

  • referring serious or persistent breaches of its codes to the Director-General of Health; and

  • conducting internal process monitoring of its undertaking those matters; and

  • arranging independent auditing of its undertaking those matters.

In undertaking those matters, the body will act in accordance with a memorandum of understanding agreed with the Director-General of Health.

New section 136C empowers the Director-General of Health to make cease and desist orders in relation to a liquor advertisement or liquor promotion.

An order may be made if the Director-General is satisfied that the advertisement or promotion is contrary to the principles of new Part 6A, or is likely to have an effect contrary to them.

An order made in relation to a liquor advertisement—

  • may require a person by or on whose behalf it was published—

    • not to publish any similar liquor advertisement in the future; and

    • if the advertisement is still being published, to take all reasonably practicable steps to withdraw it; and

  • may also order the person to publish corrective advertising described in the notice.

An order made in relation to a liquor promotion may require a person by or on whose behalf it was organised—

  • not to organise any similar liquor promotion in the future; and

  • if the promotion is still continuing, to take all reasonably practicable steps to discontinue it.

New section 136D requires the Director-General of Health to act only on the written advice of LAAB (the liquor advertising advisory body recognised under new section 136B as the Government’s advisory body on liquor advertising).

And LAAB must not advise the Director-General to act under new section 136C unless it is satisfied of the same matters the Director-General is required by that section to be satisfied of.

New section 136E permits LAAB to have regard to codes relating to advertising or promoting liquor (whether established by itself or some other person or body) in deciding whether new section 136D(2) applies to an advertisement or promotion.

New section 136F allows LAAB to act—

  • in relation to liquor advertisements or promotions referred to it by the Director-General; or

  • in relation to liquor advertisements or promotions referred to it or complained about to it by some other person; or

  • in relation to liquor advertisements or promotions that have come to its attention in some other way.

New section 136G makes it an offence to fail or refuse to comply with a cease and desist order.

The penalty is—

  • a fine of up to $200,000 in the case of a body corporate:

  • a fine of up to $60,000 in any other case.

Amendments relating to offences and enforcement

Clause 40 replaces subsections (4) and (4A) of section 155 of the principal Act (which state a defence available to people charged with the offence of selling or supplying liquor to a young person on or from the licensed premises) with a new subsection (4) making available a new and more restrictive defence.

The existing defence is that the defendant believed on reasonable grounds that the young person was 18 or older; and section 164(2A) states that the defendant had reasonable grounds if he or she sighted an evidence of age document indicating that the young person was 18 or older. But reasonable grounds may be proved in some other way.

(An evidence of age document is a passport, New Zealand driving licence, or document of some other approved kind, containing a photograph of the person to whom it is issued and information enabling his or her age to be determined.)

The effect of the new defence is that only an evidence of age document (or what seems to be an evidence of age document) will be able to be the basis for having reasonable grounds for believing that a young person is 18 or older.

The new subsection (4) provides that it is a defence if the defendant proves that what seemed to be an evidence of age document was produced to the person who sold or supplied the liquor, and the person believed on reasonable grounds that the document—

  • was in fact an evidence of age document; and

  • related to the young person; and

  • indicated that the young person was 18 or older.

Clause 41 amends section 160 of the principal Act (which makes it an offence to buy or acquire liquor with the intention of supplying it to a young person) so as to align it with the new section 37A proposed to be inserted into the Summary Offences Act 1981 by clause 47.

At present, it is not an offence if—

  • the supplier is a parent or guardian of the young person supplied; or

  • the young person supplied is attending a private social gathering.

In future, it will not be an offence if—

  • the supplier is a parent or guardian of the young person supplied; or

  • the young person supplied is attending a private social gathering, and the supplier has the consent (express or implied) of a parent or guardian of the young person.

Clause 42 makes to section 164 of the principal Act (which relates to the offence of allowing young people to enter or remain in restricted areas or supervised areas on licensed premises) amendments having the same effect as those made to section 155 by clause 36.

At present,—

  • it is a defence if the defendant believed on reasonable grounds that the young person was 18 or older; and

  • the defendant has reasonable grounds if he or she sighted an evidence of age document indicating that the young person was 18 or older, but may prove reasonable grounds in some other way.

In future it will be a defence only if the defendant proves that what seemed to be an evidence of age document was produced to the defendant or an agent or employee of the defendant, and the defendant, agent, or employee believed on reasonable grounds that the document—

  • was in fact an evidence of age document; and

  • related to the young person; and

  • indicated that the young person was 18 or older.

Clause 43 inserts into the principal Act a new section 164A, enabling the police to refer a young person served with an infringement notice under section 162C (or under section 38C of the Summary Offences Act 1981) to an approved alcohol early intervention programme.

The infringement notice process will be discontinued if the police are given a certificate stating that the young person has satisfactorily completed the programme before—

  • the infringement fee is paid; or

  • a copy of a reminder notice is filed in a court; or

  • a reminder notice is deemed to have been filed in a court.

Clause 44 substitutes a new section for section 172 of the principal Act (which makes it an offence to represent falsely to the licensee or manager of licensed premises that you are a person to whom liquor may be sold or supplied).

The new section relates to false evidence of age documents.

A false evidence of age document can be—

  • a document that appears to be an evidence of age document but is not; or

  • in relation to a particular person,—

    • a genuine evidence of age document containing false information appearing to relate to the person; or

    • a genuine evidence of age document relating to some other person.

In the section, a false evidence of age document appearing to be a document of an approved kind (that is to say, other than a passport or New Zealand driving licence) is referred to as a false prescribed evidence of age document.

It becomes an offence—

  • to present a false evidence of age document at licensed premises:

  • to sell, hire, lend, give, or otherwise dispose of a false prescribed evidence of age document to another person.

Clause 45 amends section 173 of the principal Act, which empowers a senior member of the police to obtain from a District Court Judge (or 2 or more Justices or one or more Community Magistrates) an order that every licensee in or within a specified distance of a place where there is or seems likely to be a riot to close his or her licensed premises for the sale of liquor.

At present, such an order does not have effect beyond the expiry of the day on which it is made. The amendment has the effect that—

  • such an order does not have effect beyond the expiry 48 hours after the time at which it is made; and

  • orders made during the evening may therefore have effect the next day.

Clause 46 amends section 174 of the principal Act, which empowers a member of the police to—

  • order the licensee or a manager of licensed premises where fighting or serious disorder has broken out or seems likely to break out to close the premises (or a part of them) for the sale of liquor until good order has been restored; and

  • order any person to leave the premises or part.

At present, such an order does not have effect beyond the expiry of the day on which it is given. The amendment has the effect that—

  • such an order does not have effect beyond the expiry 48 hours after the time at which it is given; and

  • orders made during the evening may therefore have effect the next day.

Amendment of regulation-making power

Clause 47 amends section 229 of the principal Act, which is the regulation-making power, so that it empowers the making of regulations providing for the preparation and contents local alcohol plans.

Clause 48 inserts into the principal Act new sections 255 to 258.

New section 255 relates to on-licences, and applies to a transitional period of 3 years after clause 12 (relating to the effect of local alcohol plans on the renewal of on-licences) comes into force.

During this transitional period, every existing on-licence will be able to be renewed as if the principal Act had not been amended. But in the case of premises in respect of which it will no longer be possible to grant an on-licence because to do so would be inconsistent with the a local alcohol plan, the period of renewal must not extend beyond the transitional period.

New section 256 relates to off-licences, and applies to a transitional period of 3 years after the earlier of—

  • the commencement of clause 17 (limiting the ability of small groceries to have off-licences); and

  • the commencement of clause 22 (relating to the effect of local alcohol plans on the renewal of off-licences).

During this transitional period, every existing off-licence will be able to be renewed as if the principal Act had not been amended. But the period of renewal must not extend beyond the transitional period in the case of premises of a kind in respect of which it will no longer be possible to grant an off-licence—

  • because to do so would be inconsistent with the a local alcohol plan; or

  • because the premises are a small grocery that no longer fits the criteria for holding an off-licence.

New section 257 relates to club licences, and applies to a transitional period of 3 years after clause 29 (relating to the effect of local alcohol plans on the renewal of club licences) come into force.

During this transitional period, every existing club licence will be able to be renewed as if the principal Act had not been amended. But in the case of premises in respect of which it will no longer be possible to grant a club licence because to do so would be inconsistent with the a local alcohol plan, the date stated for it to expire unless renewed again (which at present can be up to 3 years after renewal) must not be after the end of the transitional period.

New section 258 provides that no compensation is to be paid for—

  • the eventual impossibility of renewing certain licences because—

    • they are licences that it will no longer be possible to renew, because to do so would be inconsistent with the a local alcohol plan; or

    • they are off-licences granted in respect of premises of a kind in respect of which it will no longer be possible to grant an off-licence.

  • the imposition by the Licensing Authority on any licence it renews of conditions required by

  • the limitation on renewals provided for by new sections 255(1)(b), 256(2)(b), and 257(1)(b).

Part 2
Amendments to Summary Offences Act 1981

Clause 49 provides that the principal Act amended by clauses 50 to 53 is the Summary Offences Act 1981.

Clause 50 amends section 2(1) of the principal Act (which defines certain terms used in the principal Act) by—

  • replacing the definition of intoxicating liquor with a definition of liquor (so aligning the terminology of the Act with that of the Sale of Liquor Act 1989); and

  • inserting a new definition of young person, who is a person under 18.

Clause 51 inserts new section 37A into the principal Act.

The section makes it an offence, with a fine of up to $2 000, for an adult to supply liquor to a young person (other than a young person whose parent or guardian the adult is) without the consent of a parent or guardian of the young person.

The offence will not apply to supply to certain young people who do not have a guardian (for example a young person who is married).

The offence is committed whether or not the adult—

  • knows that the young person has a parent or guardian; or

  • knows that a parent or guardian of the young person has not consented to the supply of liquor to the young person.

But it is a defence if the adult shows that he or she believed on reasonable grounds that a parent or guardian of the young person had consented to the supply of liquor to the young person.

Clause 52 amends section 38A of the principal Act (which defines terms used in provisions relating to infringement offences) by adding to the definition of infringement offence references to the new provision (new section 37A) creating an offence in respect of which infringement notices may be issued.

Clause 53 replaces section 45 of the principal Act (which relates to the seizure and forfeiture of liquor intended, in contravention of section 38, for consumption in a public place, and the seizure and forfeiture of burglary instruments) with 2 new sections.

At present, section 45—

  • empowers members of the police to seize liquor intended, in contravention of section 38, for consumption in a public place (and to seize also the containers it is in), and provides that if the person from whom it is seized is convicted of an offence against section 38 in respect of the liquor, it and the containers it is in become forfeit to the Crown; and

  • also provides that if a person is convicted of an offence against section 14 (which relates to the possession of instruments capable of being used for burglary), the Court—

    • may order that the instruments be forfeited to the Crown, or disposed of as the Court directs at the expense of the person convicted; and

    • may also order the person to pay costs incurred by the police in retaining the instruments.

New section 44A is to the same effect as the part of existing section 45 that deals with the seizure and forfeiture of burglary instruments.

The principal effect of new section 45 is to provide for the forfeiture of liquor seized by the police from a young person who is issued with an infringement notice in respect of an offence against new section 37B alleged to have been committed by the young person’s drinking it in a public place, if the infringement fee is later paid.

In addition, new section 45 updates the part of the existing section that deals with the seizure and forfeiture of liquor, by—

  • including references to the new offences created by the Bill in respect of which it will be possible for members of the police to seize liquor; and

  • making more explicit the fact that the liquor forfeited to the Crown is the liquor in respect of which the person who was in possession of it has been convicted of an offence.

Part 3
Amendments to Land Transport Act 1998

Clause 54 provides that the principal Act amended by clauses 55 to 60 is the Land Transport Act 1998.

Clauses 55 to 60 implement various aspects of amendments making it an offence for young people who do not have a full licence to drive with any alcohol at all in their blood.

Clause 55 replaces the definition in section 2(1) of the principal Act of positive evidential breath test with a new definition that extends to people apparently younger than 20 who do not have a full licence.

In the case of such a person, the term covers an evidential breath test indicating that the person’s breath contains alcohol.

Clause 56 amends section 11 of the principal Act (which states the alcohol limits that drivers may not exceed) so that people younger than 20 who do not have a full licence may not drive or attempt to drive a motor vehicle while there is alcohol in their breath or blood.

Clause 57 amends section 57 of the principal Act (which creates offences involving exceeding breath and blood alcohol limits) so that people younger than 20 who do not have a full licence commit an offence if they drive or attempt to drive a motor vehicle while there is alcohol in their breath or blood.

Clause 58 amends section 64 of the principal Act (which relates to defences to charges involving exceeding breath or blood alcohol limits) so that it is no defence in proceedings for an offence relating to failing or refusing to comply with requirements, directions, notices, requests, and prohibitions given or imposed under the principal Act in circumstances in respect of which a breath screening test or an evidential breath test or a blood test was undergone by a person that the test later indicated that the person’s breath or blood did not contain alcohol.

Clause 59 amends section 77(3) of the principal Act (which states that the result of a positive evidential breath test is not admissible in evidence unless—

  • the person tested is advised by an enforcement officer that the test was positive and that, if the person does not request a blood test within 10 minutes, the test could on its own be conclusive evidence to lead to the person’s conviction for an offence against the principal Act; and

  • the person advises an enforcement officer that the person wishes to undergo a blood test, and allows a blood specimen to be taken).

The effect of the amendment is to add to the circumstances in respect of which advice must be given, those in which a person younger than 20 who does not have a full licence returns a positive test indicating that the person’s breath contains alcohol.

Clause 60 amends section 79(4) of the principal Act (which restricts the circumstances in which a court may order the doctor or medical analyst who gave a certificate, or the person who posted or delivered part of a specimen or gave it to the courier, to appear as a witness at a hearing) so that, in the case of a person younger than 20 who does not have a full licence, an order may be made on an application accompanied by an affidavit, sworn by a private analyst, to the effect that the person’s blood contained no alcohol.

Regulatory impact statement: proposed changes to regulation of alcohol advertising

Executive summary

A review of the current self-regulatory system for alcohol advertising found an association between the level of exposure to alcohol advertising and alcohol consumption. It recommended improvements to move to a system of enforced self-regulation through providing a legislative system in line with international best practice for alcohol advertising regulation. The preferred option is that the enhanced system is implemented through amendments to the Sale of Liquor Act 1989 alongside non-legislative actions for government agencies and industry. The main impacts arising from this proposal are that a wider range of types of advertising will be regulated, and the legislative framework and sanctions will mean there is a greater expectation that advertisements comply with the Code(s) for Advertising Liquor.

Adequacy statement

The Ministry of Health has reviewed the RIS and it is adequate according to the criteria agreed by Cabinet.

Status quo and problem
Problem

An expert multi-disciplinary Steering Group reviewed the self-regulatory system for alcohol advertising. It considered a broad range of evidence and concluded that alcohol advertising plays a role in shaping the culture of drinking, and that it reflects and amplifies drinking practices in the context of a country’s social, economic and cultural history. The evidence suggests a small but statistically significant association between the level of exposure to alcohol advertising and the level and patterns of alcohol consumption.

The Steering Group’s public consultation on alcohol advertising regulation elicited a range of feedback from stakeholders. Some stakeholders argued that alcohol advertising has some benefits, including sponsorship of community and sports groups and events and the provision of information to consumers. Other stakeholders identified harms from alcohol advertising including contributing to harmful drinking patterns, particularly among youth and people recovering from alcohol dependence, linking alcohol to desirable behaviour, and promoting the positive side of alcohol use without balancing these with the negative consequences.

Currently alcohol advertising is regulated by a self-regulatory system administered by the industry-funded Advertising Standards Authority (ASA). The ASA has a voluntary Code for Advertising Liquor (CAL) and its Advertising Standards Complaints Board (ASCB) resolves complaints alleging breaches of the CAL. On receipt of a complaint, the ASA considers whether the relevant advertisement breaches the CAL. Where a breach is determined the ASA may request the advertiser to withdraw the advert.

Strengths and weaknesses of status quo

The review concluded that the current self-regulatory system has the following strengths:

  • it is a low-cost system compared with co-regulation or government regulation:

  • there is a high level of compliance by industry participants when a complaint is upheld:

  • it is able to adapt easily and respond in a timely way to emerging issues:

  • the Advertising Standards Complaints Board and the Advertising Standards Complaints Appeal Board have a majority of public members:

  • a significant proportion of complaints are upheld:

  • all decisions are published.

The review also found the following gaps or weaknesses in the current system:

  • the industry is largely accountable for the system with limited opportunity for influence by the Government:

  • there is no legislative framework:

  • the system is not underpinned by clear policy goals:

  • there are no enforcement powers in cases of persistent or serious non-compliance:

  • the system relies on complaints to identify and address breaches of the rules, with no facility for proactive investigation of potential breaches:

  • there is a lack of systematic, independent monitoring, audit and research of the system processes and outcomes:

  • the jurisdictional scope does not extend to all forms of commercial promotion and marketing communications:

  • public consultation during previous reviews of the Code of Advertising Liquor has not elicited a diverse range of views from stakeholders.

Although the current system compares well against international standards and has a number of strengths, several features of an effective regulatory framework for alcohol advertising are lacking or insufficient. Therefore a move to enforced self-regulation is recommended through a package of improvements to the existing system.

Objectives

The review considered alcohol advertising regulation options against criteria of effectiveness, efficiency and fairness. Effectiveness was tested against the Government’s alcohol policy goals: minimising alcohol-related harm and reducing inequalities; changing the drinking culture; and minimising the exposure of young people to alcohol marketing messages.

Alternative options

In addition to the status quo (outlined above) and the preferred option of enforced self-regulation outlined below, the review considered moving to co-regulation or government regulation of alcohol advertising. The options differ as to the level of regulatory oversight of alcohol advertising.

Option 1: Co-regulation of alcohol advertising

Co-regulation involves a government agency with specific statutory functions that might include adjudicating on appeals against rulings of the body that considers advertising complaints, appointing a proportion of the members of the body that considers advertising complaints and approving the advertising codes.

Co-regulation is similarly effective to the preferred option plus it has advantages of a higher level of government control and accountability and more opportunity for engagement between key stakeholders. However, it also has the disadvantages of some reduction in the level of industry compliance and good will and some loss of flexibility and fast-paced decision-making. It is less efficient than the preferred option because it is more costly, with some costs shifted to government, and is administratively complex, possibly requiring the creation of a new agency. It is comparable to the preferred option in terms of fairness.

Option 2: Full government regulation of alcohol advertising

Government regulation would require legislated rules for alcohol advertising. A government agency would be responsible for many of the functions and processes currently undertaken by self-regulatory organisations, particularly monitoring and reviews. Infringements of the rules would be punishable primarily by fines administered by the government agency.

Government regulation would have some benefits for effectiveness, including reduced exposure to children and young people in traditional media, enabling wide extension of coverage, and improved monitoring and research ensuring future issues would be addressed. Disadvantages with respect to effectiveness are that it may displace advertising to methods that are harder to regulate, that future issues may be addressed more slowly, that flexibility and pace of decision-making would be compromised, and that loopholes would be exploited increasingly as technology progresses. Government regulation is the most costly, significantly shifts costs from industry to government, and is administratively complex. This option may also raise issues under the Bill of Rights Act 1990.

Preferred option: enforced self-regulation

Enforced self-regulation is similar to the status quo but changes would be made to strengthen and improve the existing self-regulatory system, including a legislative system. It would ensure a greater role for government, wider coverage, systematic monitoring and research, independent auditing, and strengthening compliance incentives by introducing new back stop enforcement measures in legislation.

Enforced self-regulation is preferred because it has benefits for effectiveness, efficiency and fairness over the other options considered. It retains the current system’s flexibility and fast-paced decision-making, will have a good level of industry participation and compliance, will ensure deliberate non-compliers are held to account if legislative enforcement power is included, gives an increased opportunity for government influence, facilitates wide extension of coverage, ensures emerging and future issues are addressed through improved monitoring and research, reduces the exposure of children and young people, has the potential for wider restrictions on placement and volume of advertisements, is a relatively low-cost model, and is less to lead to severe restrictions with respect to the Bill of Rights Act 1990.

The disadvantages of the preferred option are that it is more complex than the status quo, risks reduced industry engagement and good will, and increases compliance costs for the industries involved. There would be moderate cost increases to government.

Steps to mitigate the major risks have been incorporated in the policy proposal. The risk that the responsible body will not refer cases of serious or persistent non-compliance to the Crown for prosecution will be mitigated by ongoing monitoring of the outcomes of the system and the option for prosecution regardless of the responsible body’s decision if necessary. The risk of the system failing to deliver on its public policy goals will be mitigated by reviewing progress after two years. The risk of reduced industry engagement limiting effectiveness will be mitigated by investing in engaging with industry to improve compliance. The risk that increased compliance costs reduce industry cooperation will be mitigated by government funding of proactive investigation to reduce costs to the responsible body and its members.

The preferred option does not affect the stock of regulation because alcohol advertising is currently self-regulated. A move to enforced self-regulation brings the alcohol advertising regulation closer to the system for the regulation of broadcast programming, which is a co-regulatory system through the Broadcasting Act 1989.

Implementation and review

An amendment to the Sale of Liquor Act 1989 will be required to implement the proposals. The Ministry of Health will engage with the responsible body (i.e. the ASA) and arrange a memorandum of understanding to ensure that all expectations for compliance are explicit. Public health units will work with industry to assist it to comply with new requirements. Along with the responsible body, Public Health Units and District Licensing Agencies will contribute to enforcement, particularly by referring cases of suspected breaches to the responsible body. There may be an increase in costs to the responsible body depending on the volume of complaints under the extended system. This is likely to result in increased compliance costs for industry.

The responsible body will be expected to conduct internal process monitoring and to arrange independent audit. The Ministry of Health will be responsible for research and outcomes monitoring, including developing and implementing indicators to ensure the system is meeting its goals. The system will be reviewed after two years of operation.

Consultation

The results of public consultation via written submissions, hui and fono were considered during the alcohol advertising review as part of the analysis leading to the final conclusions and recommendations of the Steering Group. A youth version of the consultation document was used to encourage youth input. The Ministry of Health received 252 submissions from a side variety of individuals, liquor and advertising industry representatives, researchers, regulatory bodies, the health sector and sponsored groups. The Report of the Steering Group for the Review of the Regulation of Alcohol Advertising was published in May 2007. Stakeholders were invited to provide further feedback on the Steering Group’s recommendations at this stage. In total, 26 submissions were received. The main findings were that industry prefers full self-regulation but generally supports the review’s recommendations, while members of the public, researchers, and the public health and social sectors would prefer a greater level of government regulation.

The Ministry of Health has led the Advertising Review and has consulted with the Ministries of Justice, Youth Development, Culture and Heritage, Social Development, Education, Pacific Island Affairs, and Economic Development, the Alcohol Advisory Council, Child Youth and Family, Police, Parliamentary Counsel Office and Treasury.

Regulatory impact statement: proposed changes to Sale of Liquor Act 1989 arising from the Review of the sale and Supply of Liquor to Minors

Executive summary

Broadly, New Zealand has a permissive drinking environment. There is particular concern around the extent of social supply of liquor to minors, and unsupervised drinking by minors in large quantities. The proposed reforms aim to reduce the harm associated with the consumption of alcohol by minors. The legislative amendments are part of a package of proposals with non-legislative interventions to encourage public and industry compliance with liquor laws that restrict the sale and supply of liquor to minors.

A small number of technical proposals arising from the Review of the Sale of Liquor and Liquor Enforcement Issues are also included.

Adequacy statement

The Ministry of Justice confirms that the principles of the Code of Good Regulatory Practice and the regulatory impact analysis requirements, including the consultation requirements, have been complied with.

Status quo and problem

New Zealand has a permissive drinking environment with particular concern around the social supply of liquor to minors, and unsupervised drinking by minors in large quantities. Overall, the level of compliance by industry is good, however some licensed premises continue to sell liquor to minors. An effective government response needs to be multi-faceted and comprehensive, in line with the approach taken for similar problems such as childhood obesity and smoking. An integrated package of responses is required, including not only amendments to the Sale of Liquor Act 1989, but also non-legislative action.

Objectives

The policy objectives are to:

  • support a more moderate drinking environment and culture to reduce the normalisation of youth drinking:

  • enhance the responsibility of people who supply alcohol to minors:

  • increase youth responsibility and accountability; and

  • improve compliance and responsibility of industry.

Alternative options
Non-regulatory options

The research shows that legal restrictions on the sale and supply of liquor to minors, while necessary, must be complemented by effective enforcement and efforts to change attitudes. Therefore non-regulatory options such as communication and the provision of information form part of the package of policy responses to the issues identified. However, if implemented as isolated strategies, these approaches will not be sufficient for lasting behavioural change. Most of the proposed reforms therefore require legislative change.

Regulatory options: status quo

New Zealand’s regulatory environment for liquor is enabling rather than restrictive. Permissive attitudes and an acceptance of binge drinking and intoxication are pervasive throughout society and are considered a rite of passage for young people. Research shows that adults are the main suppliers of alcohol to minors.

The status quo is not preferred, as current liquor laws:

  • generally do not address the social supply of liquor to minors; and

  • some premises continue to sell liquor to minors, despite the current restrictions.

Maintaining the status quo would not therefore achieve the policy objectives.

Preferred option: legislative and non-legislative package
Summary and key features of preferred option

The preferred option is to reform liquor laws to allow for more emphasis on addressing social and commercial supply. Key proposals include:

  • prohibiting the supply of alcohol by an adult to a minor without the consent of a parent or guardian:

  • developing a communications strategy:

  • diversion of minors to early alcohol intervention programmes:

  • restricting the defence for selling liquor to a minor to having actually sighted an evidence of age document:

  • zero alcohol content limit for drivers under 20 who do not have a full licence; and

  • reviewing the operation of controlled purchase operations.

These proposals must be complemented by effective enforcement and efforts to change attitudes through mechanisms such as social marketing and education.

Benefits

The proposed liquor reforms are intended to reduce the harm associated with the consumption of alcohol by minors, primarily by encouraging positive behavioural change of those who sell or supply liquor to minors.

Costs

There may be some compliance costs for licensees from two proposals. This first will impact on licensed premises who persistently sell to minors. The Liquor Licensing Authority (LLA) will be required to cancel a manager’s certificate upon a third conviction for sale to a minor (including both court convictions and suspensions/cancellations of the manager’s certificate by the LLA).

The Ministry of Justice considers that the sale of liquor to minors is a serious offence and the proposal sets out the minimum circumstances to reflect that seriousness.

The second proposal that may involve financial costs for licensees is to limit defences when a sale to a minor is made. A mandatory age identification regime was considered but rejected due to the cost implications for businesses and consumers. Instead, an option to limit the reasonable defence belief was adopted where the sole defence is proof that an approved form of age identification has been sighted. This option involves lower compliance costs while creating an incentive for businesses to ensure they have systems in place to prevent the sale of liquor to minors.

Implementation and review

The proposals will be implemented through the Liquor and Young People Bill.

Consultation

The Review of the Sale and Supply of Liquor to Minors considered a range of perspectives, including those contributed at a key stakeholder workshop and through informal submissions. In addition, the following government departments and agencies were involved in the preparation of the proposals: the Ministry of Health, Ministry of Transport, the Police, the Alcohol Advisory Council of New Zealand, and the Ministry of Youth Development.

A discussion paper was circulated to key stakeholders for the Review of the Sale of Liquor and Liquor Enforcement issues and submissions were received from local government and non-government agencies, as well as industry representatives.

Regulatory impact statement: community input and restrictions on off-licences

Status quo

The Sale of Liquor Act 1989 provides a regulatory framework for the sale and supply of liquor to the public. Since the Act was passed, the effectiveness of the regulatory regime has been reviewed, sometimes requiring legislative amendment. These amendments have resulted in:

  • a change to the minimum legal purchasing age from 20 years to 18 years;

  • allowing the sale of wine, beer, mead and cider from supermarkets and grocery stores;

  • establishing the principle that, as far as possible, applications for a liquor licence should be determined locally by the District Licensing Agency (DLA);

  • providing a legal defence for minors purchasing alcohol in the context of a controlled purchase operation with Police (i.e. to identify premises selling liquor to minors);

  • • requiring all general managers to hold a prescribed qualification.

Since 1997, there has been a gradual increase in the availability of liquor, after a decade-long decline.

Increased availability of liquor sits alongside other significant environmental changes:

  • • an increase in liquor advertising (media, display on premises);

  • • an increase in the number of outlets;

  • • new alcohol products e.g., ready to drinkproducts developed and marketed;

  • • longer hours of operation by on-licence premises;

  • • highly discounted prices at off-licence premises.

Problem

Alcohol-related harm is a social problem. There are concerns about the increased number of liquor outlets (particularly off-licence outlets) since the 1999 amendment, which allowed supermarkets and grocery stores to sell wine and beer. Recent studies have shown that increased availability of alcohol is connected with harm, including alcohol-related trauma, injuries and violence. Police Alco-Link data shows that 31% to 59% of all alleged offenders and 32% to 68% of all alleged violent offenders had consumed alcohol prior to arrest. An ALAC study indicates there are about 350,000 binge drinkers in New Zealand [Ref: Alcohol Advisory Council of New Zealand (2004). Are you a binge drinker? Acohol.org.nz, vol. 4, no. 4.]. Binge drinking can cause additional health and social problems.

The 1999 amendment explicitly prohibited the sale of liquor from dairies. However, there is a difference between how the respective District Licensing Agencies consider licensing these types of premises and there is no clear legal definition distinguishing a dairy from a grocery store. As a result, many dairies have been able to obtain a liquor licence under the Sale of Liquor Act.

Enforcement proceedings against grocery stores holding off-licences represent 15% of the 878 licence applications determined by the Liquor Licensing Authority since 2003. In addition, the Liquor Licensing Authority determined 132 applications that sought to suspend or cancel a liquor licence held by these types of premises, of which 122 licences were suspended from one day to three months, three licences were cancelled and seven applications were dismissed without a suspension or cancellation ordered.

While the types of liquor that can be sold from supermarkets and grocery stores is restricted to wine, beer, mead and cider, there have been recent applications by these premises to expand the types of liquor sold using a “store within a store” concept (e.g. a bottle store operating within a supermarket). In addition, liquor stores have started expanding the range of products that they sell beyond alcohol. This is circumventing the intention of the Act to restrict the nature of the business and sales from these premises and needs to be clarified.

Communities have expressed frustration at the harm caused by the proliferation of outlets. Greater community input is needed at the licensing stage, to ensure that the needs of the community are taken into account.

Adequacy statement

The Ministry of Justice confirms that the principles of the Code of Good Regulatory Practice and the regulatory impact analysis requirements, including the consultation requirements, have been complied with in developing the preferred option. The Ministry considers this Regulatory Impact Statement to be adequate.

Objectives

The object of the Sale of Liquor Act 1989 is to provide a reasonable system of control over the sale and supply of liquor, while contributing to the reduction of liquor abuse, as far as that can be achieved through legislative means.

Alternative objectives
Community input into licensing decisions

One of the concerns that has arisen is that the licensing process is not sufficiently flexible to meet individual communities’ needs. Territorial authorities can develop alcohol plans to better manage the availability of alcohol in their communities. Although it appears that such plans have, on occasion, been taken into account by licensing authorities, the plans do not actually have any legal standing under the Sale of Liquor Act.

To ensure that Local Alcohol Plans allow the community a genuine means of exercising a measure of control and influence over the type, number, and operating hours of outlets in their area, they must be given some official status. Making it mandatory to for territorial authorities to have a Local Alcohol Plan would ensure communities had greater control over the availability of alcohol in their area. However, it would create a considerable compliance burden, and Local Alcohol Plans will not be necessary or useful in all communities. The preferred option is to make having such a plan optional, but require licensing decision-makers to give effect to a plan if there is one.

A further aspect of giving communities greater control over local licensing decisions is ensuring that there is an effective opportunity to consider the social impact of a proposed licence. However, making social impact assessments mandatory for all licence applications would create a significant compliance burden that is unlikely to be justified in all cases. The preferred option is to allow communities to decide in their Local Alcohol Plan, if they have one, whether and when a social impact assessment is required.

Off licences

The Sale of Liquor Act prohibits dairies from holding off-licenses and only allows supermarkets to sell beer, wine, mead and cider pursuant to an off-licence. It appears that applicants have been finding or looking for ways to circumvent this underlying policy. Because the current legislation appears to be ineffective in achieving the underlying policy of the Act, the only realistic option is to amend the Act to clarify what that policy is. The preferred option is, therefore, to amend the Sale of Liquor Act.

In relation to dairies, the difficulty is that dairies are obtaining liquor licences by arguing that they are in fact grocery stores. The current definition of grocery store in the Sale of Liquor Act therefore appears to be inadequate. The most effective means of ensuring that dairies are excluded is by introducing a minimum size for outlets. Introducing a minimum size of 300 square metres was considered, but was thought to be larger than was actually necessary to capture the targeted outlets. Supplementing the definition of grocery store with a lower size limit of 150 square metres is the preferred option.

In relation to supermarkets, the concern is that they are seeking to get around the prohibition on selling alcohol other than beer, wine, mead and cider by setting up adjacent stores or store within a store arrangements. Because the current legislation appears to be ineffective in achieving the underlying policy of the Act, the only realistic option is to amend the Act to clarify what that policy is. It is also necessary to amend the Act to ensure that there is no loop hole that will allow the underlying policy to be avoiding by letting liquor stores diversify into selling groceries.

Preferred option
Summary and key features of preferred option

The preferred option focuses on regulating who can sell alcohol and how that is decided. The aim is to reduce alcohol-related harm arising from the proliferation of liquor outlets and includes four main changes:

  • Changes to restrict the types of outlets that can hold an off-licence, according to size;

  • Allowing greater opportunity for the community to influence licensing decisions, such as the number and situation of off-licence outlets in their locality, by allowing territorial authorities to create local alcohol plans;

  • If set out in the local alcohol plan, requiring a social impact statement to be considered by the District Licensing Agency or Liquor Licensing Authority when they are determining an application for a new licence or changes to the conditions of an existing licence; and

  • Giving effect to local alcohol plans in licensing decisions.

Benefits

These proposals form part of a package to reform how alcohol is sold and supplied to the public, and sit alongside the earlier proposals that target the sale and supply of liquor to young people, and regulate liquor advertising. As alcohol-related harm is a multi-faceted issue, benefits arising from the preferred option are likely to be enhanced by working in tandem with a range of strategies.

Changes to the types of premises that can hold liquor licences are expected to reduce the availability of liquor, through reducing the number of liquor outlets. Research supports a reduction in the availability of alcohol. In particular, research suggests that these changes are likely to result in a reduction in the number of violent offences in that area, and alcohol-related harm arising in University areas.

Requiring effect to be given to a local alcohol plan (if developed), changing the criteria for an objection to a licence application and requiring the development and consideration of social impact statements will allow greater opportunity for community input and a wider of range of factors to be taken into account in licensing decisions. This is likely to limit the potential harm arising from licensed premises according to the needs of the community. Social impact statements are a requirement in many comparable international jurisdictions, such as NSW.

Allowing local authorities to develop local alcohol plans that must then be given effect in licensing decisions means that deliberate thought will be given to the role that alcohol plays in the community. These plans are developed in consultation with the community, and provide an opportunity for the community to strategically consider how liquor should be sold and regulated in the community to best meet the needs of their community. This may mean reducing the trading hours for licensed premises or restricting the areas where liquor can be sold. Some communities have developed an entertainment area to isolate liquor sales in one area. Aligning local alcohol plans with licensing decisions provides a tailored and coordinated response to meet the needs of the particular community in relation to the sale and supply of liquor.

Costs

There will be industry costs arising from the preferred option, as grocery stores will be prevented from obtaining a liquor licence, unless they meet the new minimum size criteria. No compensation is payable. However, there are transitional arrangements to help minimise the financial loss of losing an off-licence and allows businesses time to prepare for the change. For example, a licence held in relation to these premises will not be cancelled during its licence term as a result of these proposals. This proposal is likely to increase costs for consumers, who may need to travel further to obtain alcohol.

Clarifying the types of sales suitable from a supermarket or liquor store may result in the loss of potential sales from these premises. However, it will save costs associated with testing the law by applying to the District Licensing Agency or Liquor Licensing Authority to obtain a licence for these types of sales, or for enforcement agencies to challenge these types of licences.

If a local alcohol plan requires applicants to include a social impact statement within their licensing application, which will impose additional costs on applicants for a liquor licence.

There are also potential costs arising from increased community input into licensing decisions through a broader range of criteria being considered and applicants being able to object to licences or licence conditions. Restrictions arising from these objections may reduce earnings from liquor sales and add costs for potential licensees responding to objections at hearings.

There will be costs associated with local authorities developing local alcohol plans, where they do not already exist. There may also be costs for individual licensed premises that have additional licence conditions imposed through the application of the local alcohol plan during licensing decisions.

Conclusion

Overall, the benefits arising from the preferred option are expected to outweigh any costs. Each proposal is expected to contribute a small amount towards the reduction of liquor abuse, and is part of a package that should be considered together. The cost of alcohol related harm to society, e.g. violent offences, traffic crashes and disturbances including property damage is high. Even a small reduction means a substantial savings in social costs.

Implementation and review

The proposals will be implemented through the Sale and Supply of Liquor and Liquor Enforcement Bill.

Consultation

The following government departments and agencies were involved in the development of the preferred option: the Ministries of Health and Economic Development, New Zealand Police, the Alcohol Advisory Council of New Zealand, Local Government New Zealand (which also consulted with stakeholders from various territorial authorities) and the Department of Internal Affairs. The Department of the Prime Minister and Cabinet was informed.