Recommendation

The Justice and Electoral Committee has examined the Alcohol Reform Bill and recommends that it be passed with the amendments shown.

Introduction

This bill seeks to implement the Government’s response to the Law Commission’s 2010 report, Alcohol in Our Lives: Curbing the Harm. Alcohol has been recognised as the cause of significant social and health-related harm, and is implicated in 30 percent of all police-recorded offences, 34 percent of recorded family violence, and 50 percent of all homicides. ACC estimates that almost a quarter of all claims are alcohol-related, as are up to 70 percent of emergency department presentations for injury.

This bill has five policy objectives:

• •to reduce excessive drinking by adults and young people

• •to reduce the harm caused by alcohol use, including crime, disorder, public nuisance, and negative public health outcomes

• •to support the safe and responsible sale, supply and consumption of alcohol

• •to improve community input into local alcohol licensing decisions

• •to improve the operation of the alcohol licensing system.

The bill is intended to repeal and replace the Sale of Liquor Act 1989, and amend the Summary Offences Act 1981, the Children, Young Persons, and Their Families Act 1989, and the Local Government Act 2002.

The key measures proposed in the bill would affect the licensing system, the legal alcohol purchase age, the supply of alcohol to under 18-year-olds by parents or guardians, the promotion of alcohol, the consumption of alcohol in public places, the controls on alcoholic products, and the way alcohol-related offences are enforced.

Our consideration and the structure of this commentary

We understand that the provisions relating to the age of purchase will be subject to a conscience vote for members. We begin by setting out only the major issues raised during the hearings of evidence on that particular issue. We then discuss the amendments we have recommended to the bill with the view to making it an effective piece of legislation.

This commentary addresses the significant changes we recommend to the bill; changes of a minor or technical nature have not been included.

Minimum age of purchase

The bill proposes to introduce a split minimum age of purchase, which would allow people aged 18 years and older to purchase alcohol for consumption on licensed premises, but restrict the sale of alcohol from off-licenses to people aged 20 and older.

Supermarkets and grocery stores

Pricing information

We recommend inserting new clauses 382(1)(ba), 382(1)(bb) and 382(2) into the bill to ensure that information essential to work on the possibility of a minimum pricing regime continues to be available. Clause 382(1)(ba) would require the alcohol industry to provide the Government, free of charge, with specified information on the price and quantity of alcohol sold. New clause 382(1)(bb) would also allow the prescribed information to be set out in regulations made by Order in Council on the recommendation of the Minister of Justice. Clause 382(2) would create an offence of failing to provide the stated information, punishable with a fine not exceeding $20,000.

Irresponsible promotion of alcohol

We recommend amending clause 220, which regulates the irresponsible promotion of alcohol, in order to ensure it captures correctly the intended types of promotion. We recommend that the definition of irresponsible promotion in subclause (1)(a) be amended to include the words “or is likely to encourage”. This would ensure that the bill did not weaken the current provisions governing the irresponsible promotion of alcohol.

We also recommend inserting replacement subclauses (1)(b) and (ba) in order to make it clear that the offence of advertising or promoting discounts on alcohol of 25 percent or more below the ordinary price would apply to all types of licensed premises. New subclause (1)(ba)(ii) would stipulate that any discount captured by this provision which was on display within licensed premises must not be visible from outside the premises concerned. Replacement subclause (1)(b) would also make it clear that the advertising provisions did not apply to businesses which operated through a remote sales channel, such as mail order catalogues or websites, provided that the remote sale channel was the primary point of contact for the customer, and that contact was initiated by the customer.

We recommend that subclause (1)(c) be amended to clarify that advertising complimentary samples of alcohol which are to be consumed on the premises concerned would not be considered an offence under this subclause, and that a licensed business would be permitted to advertise or promote free alcohol on its premises.

We also recommend inserting new clause 220(1A) to clarify that subclause (1)(d) would not apply to loyalty programmes that offer reward points or discounts, unless those points or discounts could be claimed only on alcohol.

Local alcohol policies

We recommend that clause 77(3) be amended so that no matters other than licensing matters could be included in a Local Alcohol Policy (LAP). Clause 77(3) as introduced would allow non-licensing matters to be included in an LAP. Such matters in an LAP would not be enforceable; and without the clause territorial authorities would still be able to deal with such matters through other legislation, for example the by-law making powers in the Local Government Act 2002 (LGA). However we recommend amending clause 77(1) to ensure that local communities could set recommended discretionary conditions for licensed premises in their region.

We recommend that clause 79(1)(c) be deleted, as we do not believe considering an area’s socio-economic status to be necessary to assess the impact of alcohol on a local community when developing an LAP.

We recommend inserting new clause 86B to clarify that the regulations disallowance process would apply only to the trading hours and one-way-door aspects of an LAP. We are aware of concern that LAP provisions are likely to be considered to have significant legislative effect and could be subject to the Regulations (Disallowance) Act 1989. This could result in LAPs being overturned by Parliament, and would undermine the ability of local government to make provisions relevant to their communities. Therefore we recommend that only the trading hours and one-way-door elements of LAPs be subject to the disallowance process, as they override the default provisions of the bill.

We also recommend inserting new clause 77A, which would require a territorial authority to have regard to the objectives and policies of their district plan when developing an LAP. In the bill as introduced clause 88 would allow an LAP to be more restrictive than the relevant district plan. We do not believe it necessary for LAPs to be entirely consistent with district plans, as they deal with different areas of concern. However, we do not consider it desirable for territorial authorities to have clashing policies. We therefore recommend requiring that where a conflict arises it be taken into consideration in drafting an LAP.

We recommend amending clause 85 to allow the Alcohol Regulatory and Licensing Authority to reach a decision on an amended LAP without having to hold further public hearings. This change would ensure the LAP approval process was not subject to continual appeals against resubmitted LAPs. The licensing authority would still retain the discretion to hold a public hearing if it considered this necessary, and would be required to have regard to the issues raised in the initial appeal when coming to a decision on an amended LAP.

We also recommend amending clause 87, which sets out when an LAP comes into force, to include provisions relating to the commencement of one-way door policies. This change would ensure that one-way door policies imposed by an LAP were applied evenly to all licensed premises at the same time. We recommend further changes to clause 87(2) to remove the three-month transition period for opening hours or one-way-door conditions if they are the same as those in the previous LAP, to ensure continuity of operating conditions. We also recommend inserting new clause 50A to require licensees to comply with a one-way-door condition imposed either through an LAP or as a condition of a licence. This subclause would also make it clear that a more restrictive one-way-door policy imposed as a licence condition would take precedence over such a condition imposed by an LAP.

We recommend inserting new subclause (4) into clause 87, to require a territorial authority to give all licensees notice of changes to opening hours or the introduction of a one-way-door policy introduced by an LAP. Notice of these changes and the date on which the changes came into force would have to be provided to the licensees as soon as practicable.

We recommend inserting replacement clause 92, which would require a territorial authority to undertake a consultative review of an LAP every six years. We believe regular reviews would be a sensible measure to ensure that an LAP meets the needs of a community; however we do not believe it necessary for an LAP to expire every six years as proposed in the bill as introduced.

We also recommend inserting new clause 91(2) to ensure that any revocation and replacement of an LAP would be carried out using the process set out in the bill, and in a way consistent with the LAP adoption process.

Liquor bans

We recommend amending clause 402, which would amend the LGA, to remove the criteria in proposed new section 147A(2) for continuing an alcohol control bylaw. Instead we recommend that new section 147A(2) be replaced with new section 147A(3) to require territorial authorities to be satisfied that the high levels of disorder or crime that justified making the bylaw in the first place will arise if the bylaw were lifted.

We also recommend that new section 147A(1), also in clause 402, be amended to state with greater clarity that a territorial authority must be satisfied that the criteria set out in section 147A(1) have been met before a bylaw can be applied to any specified public place or period of time.

We are aware that territorial authorities have from time to time made bylaws for one-off events such as concerts to avoid a high risk of harm from the excessive consumption of alcohol. As it is unlikely the criteria in 147A(1)(b) would be met we recommend that new section 147A(1) require that a territorial authority intending to apply temporary liquor bans for one-off events be satisfied only that the bylaw could be justified as a reasonable limitation on people’s rights and freedoms.

We recommend deleting clause 404 in the bill as introduced and moving new section 169A of the LGA into clause 403. We also recommend that new section 169A be amended to make it consistent with the New Zealand Bill of Rights Act 1990. As introduced, this clause would create a reverse onus of proof by requiring people contesting an allegation of a liquor ban breach to prove that the liquid seized was not alcohol. This clause was criticised as unjustifiable by the Attorney-General, and we recommend amending it so that section 169A(3) would not apply if the defendant gave at least 20 working days written notice of their intention to contest the allegation that the substance in their possession was alcohol. This would require the police to prove, beyond reasonable doubt, that the liquid was alcohol, in order to prove the guilt of the accused.

We also recommend amending clause 408, which would insert new section 245A into the LGA. As introduced this clause would allow enforcement officers to require a person suspected of breaching a liquor ban to provide their name and address and those of any other people connected with the alleged offence. We consider that this provision may breach the Bill of Rights Act, and therefore recommend that new section 245A(b) be deleted. We also recommend that new section 245A(a) be amended to allow police to obtain the date of birth of a person suspected of breaching a liquor ban, in the interests of helping police to identify people accurately.

Exemptions for Police, Defence Force, and Fire Service canteens

We recommend amending clause 14 of the bill, which provides an exemption for Police, Defence Force, and Fire Service messes and canteens to hold a licence to sell and supply alcohol. We recommend inserting new subclause 14(2) which would require the Commissioner of Police, the Chief of Defence Force, and the Chief Executive of the New Zealand Fire Service to ensure that canteens operated by their respective services were run under guidelines and codes of practice following as closely as possible the rules and restrictions which apply to clubs under the bill. For the purposes of clarity new clause 14(3) defines the types of premises that would fall under the jurisdiction of the various service heads.

Regulation making powers

The Regulations Review Committee expressed concern that the reasons and justifications for the exemption-making powers in clauses 385(1)(d) and (g) were not clear. We considered this matter carefully and are satisfied that the provisions, which would grant licensing fee waivers in certain circumstances, are justified. However we recommend that these subclauses be amended to state more precisely the circumstances in which the regulations might permit a waiver or refund of fees.

We also recommend amending clause 385(1)(a)(i) to state that territorial authorities may recover the costs of inspectors and enforcement activities through fees, and amending 385(1)(b)(v) to clarify that the previous conduct to be considered when setting fees would include the conduct of a licensee at both the premises that the application relates to and any previous premises where they have operated.

We recommend inserting new clause 272A to allow licences to be suspended if payment of the relevant licensing fee is more than 30 days late, and to allow the suspension to continue until all fees and penalties have been paid.

Provision of low-alcohol beverages and water

We recommend amending clause 52 to make provision for exempting the holder of an on-licence from the requirement to sell low-alcohol beverages if the licence application is for premises that sell only the licensee’s own range of alcoholic beverages, which does not include low-alcohol products. This change would ensure that wineries that run restaurants selling their own ranges of wine could continue operating without having to stock low-alcohol beverages, unless they produce such products themselves.

We recommend deleting clause 56 to remove the requirement that free drinking water be made available in every room and outdoor area of on-licensed premises. We were concerned that this requirement could increase the risk of contamination or drink spiking. Instead we recommend inserting new clause 106(1)A(c), to require the District Licensing Committee or the Alcohol Regulatory and Licensing Authority to specify, as a licence condition, where water must be freely available on the premises. We also recommend inserting a definition of freely available to customers in relation to water into clause 5.

District Licensing Committees

We recommend amending clause 177 to specify more precisely that a territorial authority member on a District Licensing Committee must be an elected member of that authority. This amendment would also ensure that Auckland Council local board members were eligible for appointment to District Licensing Committees.

We recommend amending clause 179 by deleting subclause 6 and stating more precisely in replacement subclause 5 the classes of people who would be ineligible for membership of such a committee. Under the bill as introduced a family relationship with a person in the alcohol industry would render a person ineligible for membership. We believe that this could be considered discriminatory, and recommend amending the clause to exclude a person who “could not perform his or her duties without actual bias or the appearance of bias”.

We recommend amending clause 194 to require all decisions on liquor licence applications to state what reports were received on the suitability of the application and the view taken by the decision-maker on each of the reports regarding the application. This would ensure that the evidence and advice considered by the decision-maker were in the public domain.

Licensing application criteria

We recommend inserting new clause 100(2) in order to carry over a provision from the Sale of Liquor Act which prohibits the licensing decision-maker from considering the potential effect of a licence on the business of another licence holder. We do not believe that businesses should be able to use the licensing process to block potential competitors.

Licensing considerations

We recommend deleting clause 7 and replacing it with new clause 100A, which deals with the consideration of the effect on the amenity and good order of a locality of issuing or renewing a liquor licence. Clause 100A(1)(b) would require the decision-maker on an application for a new liquor licence to consider the impact of the proposed licensed premises on neighbouring land and the compatibility of such premises with the use of that land.

To protect existing licence holders, we recommend including clause 100A(2), which would require the decision-maker to have regard to current and possible noise, and nuisance and vandalism in determining whether to renew a licence. Decision-makers would not have to consider the purposes for which the land near the premises was used. This would ensure that existing licence holders were not penalised as a result of changes to land use in the area which occurred during the term of their licence.

New clause 100A would remove clauses 7(2)(a),(b), and (e), and thus the requirement to consider the availability of car-parking facilities, the current and possible density and movements of traffic, and the harmony of the environment from the decision-making process. However clause 100A(1) would require the decision-maker to assess the current and possible noise in the area, and the current and possible incidence of nuisance and vandalism when deciding a liquor licence application. We consider that these criteria would reflect the intent of the bill more accurately; and that issues such as car parking would be dealt with more appropriately under the Resource Management Act 1991.

Trading hours

We recommend amending clause 238 to allow people to be on licensed premises outside of the licensed hours in order to allow the premises to open for breakfast service. This change would permit the sale only of food and non-alcoholic beverages, and no alcohol could be served until the premises’ licensed trading hours began. To ensure a reasonable period between the last sales of alcohol and premises opening for breakfast service, we recommend that this provision apply from 6 am, ensuring a gap of two hours from the default national closing time of 4 am.

We also recommend amending clause 135(o) to allow any reasonable condition not inconsistent with the Act to be placed on special licences. A special licence would be available only for a particular event or series of events, such as international sports events or champagne breakfast functions, and is not intended to be a means of allowing licensees to operate regularly outside of the maximum hours.

Manager’s certificates

We recommend amending clause 200, to require the holder of a manager’s certificate to be aged at least 20 years. Current practise by the Liquor Licensing Authority is to require an applicant for a manager’s certificate to be aged at least 18 years. We consider 20 to be an appropriate minimum age for manager’s certificate holders and this change would ensure consistency across the country.

However we recommend inserting new clause 200(2) so that holders of manager’s certificates who are aged under 20 when the bill is passed can continue to hold and work under the terms of their certificates. This would ensure that no one was unfairly penalised by the change to the law.

We recommend amending clause 393 so that a general manager’s certificate issued under the Sale of Liquor Act would remain in force until its stated expiry date, at which point it could be renewed in accordance with the bill’s provisions. This change would ensure that general manager’s certificate holders were subject to the same transitional provisions as club manager’s certificate holders.

Penalties for repeated non-compliance

We recommend that clause 273 be deleted and replaced, as we believe the clause as introduced could create an undesirable blurring of the distinction between criminal and civil processes. We recommend inserting replacement clause 273, which specifically describes the types of behaviour that would be considered holdings giving rise to cancellation of a licence or a manager’s certificate under clauses 274 and 275.

Remote sales

We recommend amending clause 35(1) by inserting new subclause (ba) so that businesses which only sell alcohol remotely, for example over the internet or by mail order, could obtain an off-licence without being required to have a physical retail premises.

We also recommend that the signage requirements for licensed premises and the licence display requirements in clause 58(1) be amended to accommodate remote sales businesses.

Types of alcohol to be sold

Replacement clause 59 would align the definitions of beer, wine, and mead with those applicable under the Food Act 1981. This would ensure consistency between the various areas of the law which regulate alcoholic beverages, and clarify which products supermarkets could stock. As the food standard differentiates between wines made from grapes and those made from fruit or vegetables, we also recommend inserting the food standard definition of fruit and vegetable wine into clause 59, to ensure the bill captures all types of wines. We also recommend inserting a definition of wine into clause 5 to align it with new clause 59.

Labour Party minority view

The most in-depth inquiry into New Zealand’s alcohol laws was instigated by Labour. Labour referred the task of examining and evaluating the current laws and policies relating to the sale and consumption of liquor in New Zealand and formulating a revised policy framework to the Law Commission. It had been 24 years since the last full review of New Zealand’s alcohol laws, so broad terms of reference for the inquiry were adopted.

Given the former Labour Government’s role in pursuing comprehensive alcohol reform, the current Labour members of the committee are disappointed that this bill fails to address the evidence that the Law Commission presented to the Government in its report, Alcohol in Our Lives: Curbing the Harm. As part of the process of pulling together this report, three thousand New Zealanders made their views known to the commission, resulting in one of the most extensive inquiries undertaken by any New Zealand Government. It is therefore concerning that so much of the evidence and so many of the recommendations have been ignored.

Despite our reservations, we supported sending the bill to the Justice and Electoral Committee, so that submissions from the interested communities, organisations, and individuals can be heard. Many of the submitters articulated a concern that this bill fails to take advantage of the once-in-a-generation opportunity to address the excessive drinking in our society and the subsequent impact this can have on our families, justice system, health system, and even our productivity levels.

Labour members of the committee will be supporting this bill despite having major reservations about the bill’s failures to address key issues. We will be seeking to raise our concerns during the committee stages of the bill with particular reference to the following areas:

• •lack of minimum pricing leading to availability of extremely inexpensive alcohol

• •commercialisation of alcohol as an ordinary commodity making it readily accessible

• •lack of restrictions regarding advertising and marketing

• •failure to lower the blood alcohol level allowable when driving

• •focus on the purchase age of alcohol

• •failure to address foetal alcohol syndrome

• •failure to address treatment options.

Each of the areas of concern is discussed in more detail throughout this report.

Green Party minority view

The Green Party is disappointed that the bill fails to address the issues of price and the advertising and sponsorship of alcohol, even though these are widely acknowledged to be the underlying drivers of our entrenched drinking culture.

Submitter after submitter told us that price is the single most important issue in reducing our binge drinking culture. Many pointed out that alcohol is sold so cheaply in supermarkets that bars, and even liquor outlets, can buy alcohol more cheaply from a supermarket than they can from a wholesaler.

Regrettably the bill does nothing to stop supermarkets from engaging in the predatory practice of selling alcohol at ridiculously cheap, below-cost prices, to lure customers, especially young customers, into their stores.

Cheap alcohol encourages people to drink more often and in large amounts. In our view we will never reduce our binge drinking culture if we allow alcohol to be sold so cheaply that young people can load up on alcohol for binge drinking sessions every weekend.

The Government has acknowledged that increasing the price of tobacco has been an effective strategy in reducing the number of smokers. We cannot understand why we would not extend the same effective strategy to reduce the numbers of heavy drinkers.

While we welcome the proposed amendment that will require the alcohol industry to provide the Government, free of charge, with information on the price and quantity of alcohol sold, we believe the bill should go further and introduce a minimum price per standard drink of alcohol, as a way of preventing the heavy discounting of alcohol, especially by supermarkets.

Most submitters wanted the legislation to address advertising and sponsorship of alcohol. In our view it is extraordinary that we have allowed a legalised drug to be heavily marketed and advertised, including to teenagers and young people. Alcohol advertising glamorises and normalises alcohol and acts as a powerful recruiter of young drinkers. It also links the rites of passage for young people to the consumption of alcohol and creates enormous peer pressure to drink. It is so prevalent that 90 percent of children are exposed to alcohol advertising on television every week, so it is hardly surprising that there is intense peer-group pressure on teenagers to drink.

We do not believe we will reduce our binge drinking culture if we allow the saturation advertising and sponsorship of alcohol to continue unabated. We were told that the alcohol industry is second only to the gambling industry in its spend on advertising. That is why we want to see a tobacco-style prohibition of all alcohol advertising across all media, and a phasing out of alcohol advertising or sponsorship of sporting and cultural events.

We have no confidence, either, in the self-regulatory system for alcohol advertising.

We believe the failure to address the issues of alcohol advertising seriously weakens this bill, and the impact it will have. We assume the failure of the bill to address the issue of advertising and price is because of the pressure from vested interests in the hospitality, food, liquor and advertising industries.

In our view this bill targets young people in a politically expedient way, when 92 percent of heavy drinkers are 20 and above. We believe it is very easy to divert the issue into a debate about the drinking age when the problems of binge drinking affect every age group in New Zealand.

We are also concerned that the bill does nothing to address the very serious public health issue that 500 babies are born every year with foetal alcohol syndrome. In our view, it would be utterly irresponsible not to introduce mandatory labels that warn that alcohol can cause foetal alcohol syndrome, as part of a wider campaign to warn women, and especially young women, of the risks of drinking while pregnant.

We strongly favour generic warning labels on alcohol, and nutritional information panels on alcohol. We note that all non-alcoholic drinks are required to have nutrition labels, and cannot see any good reason why the same rules should not apply to alcoholic drinks.

We find it almost incomprehensible that the legislation does not propose lowering the drink-driving limit, but rather allows people to drive around intoxicated.

Finally we are concerned at the heavy-handed provisions that give the police excessive powers to arrest people without a warrant–provisions that infringe on the basic civil and political rights of our democracy such as the right against arbitrary arrest and the right to a presumption of innocence.

We will, nevertheless, support this bill because we support many of its provisions, such as local alcohol plans, requiring supermarkets to display alcohol in only one section of their stores. Our concern is that the bill does not go far enough, and fails to include many of the key recommendations of the Law Commission in its report Alcohol in Our Lives: Curbing the Harm.

We will be seeking to amend it at the committee stages of its consideration in the House.