Changes to the sale of liquor – no more free wine ads

Friday 2 May 2014

Authors: Marija Batistich and Kristin Wilson

First published in NZ Winegrower, February-March 2014 edition.

The recent “Don’t be a ‘cool’ Dad” publicity campaign was a high-profile reminder that a significant number of changes to existing alcohol laws came into effect on 18 December 2013.

Those operating both cellar door sales and online ordering options will need to be aware the changes relate to more than the sale and supply of alcohol to minors. Discounts, promotions and trading hours all feature in the changes – with a new “three strikes and you’re out” policy threatening the liquor licenses of those who fall foul of the new rules.

The reforms are focused on changing the way people drink, in an effort to decrease the harm caused by excessive and inappropriate consumption of alcohol. The amendments will have significant implications for both consumers and in particular for those providing alcohol in the course of their business.

The changes are focussed on reducing inappropriate drinking by controlling the promotion and advertisement of alcohol. An array of promotion types are considered to be irresponsible promotion under the Act. For example, the public advertisement of alcohol which suggests a discount of 25% or more off standard retail price is (subject to some exceptions) illegal under the amendments. This prohibits two for one offers, buy two get the third free offers and any similar promotions which can be seen or heard outside of licensed premises. Promotions involving an opportunity to win a prize when alcohol is bought are also illegal, as are advertisements with ‘special appeal’ to minors and anything else that is likely to encourage people to consume to an excessive extent. Fines and the suspension of licenses apply where these rules are breached.

As examples of the restrictions in the real world, promotions offering a free bottle of wine or other alcoholic beverage when dining cannot be run and degustation or set menus that include alcohol will need to ensure that any discount on the retail price of wine is less than 25%.

Where the Alcohol Regulatory and Licensing Authority finds that irresponsible promotion has occurred, the new “three strikes” policy applies so that licensees or managers with three negative holdings within a three year period will have their license cancelled. The Licensing Authority decision is made by majority vote following any relevant investigations and their decision may then be appealed to the High Court.

The role of local authorities under the proposed changes is significantly increased, as they will now be able to produce local alcohol policies to provide guidance as to the areas in which licensed premises may be located, maximum trading hours, and other measures to control alcohol use such as one-way door policies. Individuals and businesses will have the opportunity to submit on the draft policy and a public hearing will be held into matters raised in those submissions.

Where no maximum trading hours are specified in the local alcohol policy, bars and clubs will now be required to close at 4am and supermarkets and other retailers will be prohibited from selling alcohol before 7am and after 11pm.

Applications for liquor licenses will be made to a new body called the District Licensing Committee comprising three members (including one chairperson) appointed by the territorial authority. Objections to applications for licences may be made by those with an interest in the application which is greater than the general public. This will include neighbours to proposed licensed premises. A number of factors are considered in deciding whether to grant a licence including whether the amenity and good order of the locality would be likely to be reduced by the effects of the issue of the licence. Matters such as noise, nuisance and vandalism will all be relevant to this inquiry. Maintaining good relationships with neighbours has never been more important for those wineries with dining and function facilities. The decision of the Licensing Committee may be appealed to the Licensing Authority.

In addition to these amendments, one of the more highly publicised aspects of the new regime is the changes relating to the sale and supply of alcohol to minors. It is an offence to sell or supply alcohol to minors. For licensed premises there is an exception where the minor is accompanied by a guardian and the guardian supplies the alcohol. However it is important to remember that outside of licensed premises any person may be prosecuted for supplying alcohol to a minor. The new Act includes the requirement to obtain the express consent of a child’s parents in order to supply them with alcohol and has been the subject of some commentary in terms of how this can be communicated (ie. orally or in writing), as well as subsequently evidenced. In addition to this, anyone who supplies alcohol to minors, including to their own child or with express parental consent, must supply the alcohol in a “responsible manner”. To comply with this requirement parents should ensure that adequate supervision is provided, that non-alcoholic beverages and food are available and that provision is made for safe transport. Parents should also be cautious about the length of time the minors are drinking and the type of alcohol being consumed.

The effect of these changes will be wide reaching for both the wine industry, and the general public. It will be some time until the reforms have fully taken effect and their success can properly be assessed.


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

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