Part 2: Licensing the sale and supply of liquor

Liquor licensing by territorial authorities.

2.1
The primary piece of legislation governing the sale and supply of liquor is the Sale of Liquor Act 1989. The Act was passed to:

… establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse, so far as can be achieved by legislative means.1

2.2
The Act set up a licensing system that territorial authorities administer in their city or district.

2.3
Each of the 73 territorial authorities is designated a DLA by the Act. DLAs are independent statutory bodies that issue licences to people, businesses, or other entities (liquor licences), enabling them to sell or supply liquor to the public at the premises named on the licence (licensed premises). DLAs also issue certificates to the managers of licensed premises. DLAs monitor licensed premises to ensure that the premises are meeting the conditions of their licences, are complying with the requirements of the Act, and are operated responsibly.

2.4
In nearly all of the territorial authorities that we visited, territorial authority staff (usually environmental health staff ) were exercising the powers and performing the decision-making functions of the DLA.

District licensing inspectors

2.5
DLAs must appoint one or more inspectors to inquire into, and report on, applications for a liquor licence or manager’s certificate. The inspector has specific powers under the Act, and in exercising those statutory powers is expected to act independently of the DLA and the territorial authority. The functions and role of the inspector are critical to the effective administration of the Act.

Types of liquor licences

2.6
There are four types of liquor licences issued by DLAs:

  • On-licence (for example, for a hotel, tavern, restaurant, or café). This licence authorises the holder to sell and supply liquor for consumption on the premises described in the licence.
  • Off -licence (for example, for a bottle store or supermarket). This licence authorises the holder to sell or deliver liquor on or from the premises described in the licence for consumption off the premises.
  • Club licence (for example, for a sports club, Returned Services’ Association club, or workingmen’s club). This licence authorises the holder to sell and supply liquor on the premises described in the licence, but only to club members and specified guests.
  • Special licence (for example, for a food and wine festival or for a party at an unlicensed venue such as a community hall). Special licences allow holders to sell and supply liquor to persons attending an occasion, event, or social gathering, or for the holder of an on-licence or a club licence to sell and supply liquor at any times when licensed premises are required to be closed.

2.7
A person taking over licensed premises and seeking to sell and supply liquor must obtain a temporary authority. This enables the new owner to operate the premises on the same terms and conditions as previously until a new liquor licence has been obtained.

2.8
Every new liquor licence (except for a special licence) is issued initially for a year (known as a probationary period). This allows the monitoring authorities and the neighbours to monitor the business to assess the commitment of the licensee to host responsibility practice and to compliance with the conditions of the licence. After the initial year, licences can be renewed for three-year terms. Hotels and taverns, and holders of off -licences, may not sell liquor on Good Friday, Easter Sunday, Christmas Day, or before 1pm on ANZAC Day (except to people dining or living on the premises).

2.9
DLAs may issue all liquor licences and manager’s certificates except where an application is opposed by (as applicable) the Police, the local public health service,2 or a member of the public. Of the large number of applications that DLAs receive every year for new licences or certificates, or for renewals (possibly about 30,0003 in total throughout New Zealand), very few are opposed. DLAs issue all special licences.

Certificates for managers

2.10
Controls are exercised not only on who may hold a liquor licence but also on who may manage licensed premises. Accordingly, the Act defines the criteria to be met by people seeking to work in licensed premises as duty managers.

2.11
Before any person can manage licensed premises they must obtain a manager’s certificate, which the DLA issues. There are two types of manager’s certificate − a general manager’s certificate, which allows a person to manage all types of licensed premises, and a club manager’s certificate, which allows the holder to manage only premises holding a club licence.4 To obtain the certificate, a person must prove that they understand and are familiar with the requirements of the Act, are a suitable person to manage the sale of liquor, and have obtained the Licence Controller Qualification.5 The certificate is first issued for 12 months, and then can be renewed every three years.

2.12
The Act recognises the vital role played by the manager of licensed premises. A manager must be on duty at all times that liquor is being sold to the public. The Act makes that manager responsible for complying with, and enforcing, the provisions of the Act and the conditions of the liquor licence, and for the conduct of the premises.

2.13
The manager’s role in managing the risks of alcohol abuse makes it important that each DLA assess carefully the suitability of applicants. We discuss this further in Part 6.

Management of licensed premises

2.14
The Act includes provisions designed to encourage licensed premises to sell liquor in a responsible manner. There are prohibitions on allowing intoxicated persons onto the premises or allowing persons to become intoxicated, selling liquor to minors (defined in the Act as people aged under 18), and encouraging excessive drinking.

2.15
The Act makes the DLA responsible for setting conditions when issuing licences for premises selling liquor, having regard to reducing alcohol abuse. Within certain limits set by the Act, DLAs are able to set conditions that are appropriate to the type of licence being sought, and the particular circumstances of the application. For all licences except off-licences, the Act also empowers the DLA to set conditions about "any other matter aimed at promoting the responsible consumption of liquor".

2.16
Other provisions designed to promote responsible management and address the risk of alcohol abuse are the requirement for licensed premises to restrict access by minors to designated areas,6 and the specific responsibilities of managers (see paragraphs 2.10-2.13).

2.17
The Act gives enforcement powers to the Police and the DLA.7 It also specifies penalties for various offences, such as:

  • selling or supplying liquor without a licence;
  • selling to minors;
  • allowing minors to be in restricted areas;
  • promoting the excessive consumption of liquor;
  • selling liquor to an intoxicated person, or allowing a person to become intoxicated on the premises; and
  • allowing drunkenness or disorderly conduct.

How applications are considered

2.18
When they consider applications for a liquor licence or manager’s certificate, DLAs are required to have regard to the criteria set out in the Act.8 For a liquor licence, these criteria (depending on the type of licence) relate to:

  • the suitability of the applicant;
  • the days on which, and the hours during which, the applicant proposes to sell liquor;
  • the areas of the premises that the applicant proposes be designated as restricted or supervised areas;
  • how the applicant will ensure that liquor will not be sold to prohibited persons; and
  • the applicant’s proposals for:
    • selling and supplying non-alcoholic refreshments and food;
    • selling and supplying low-alcohol beverages;
    • providing help with, or information about, alternative forms of transport from the licensed premises; and
    • other goods that the applicant intends to sell or supply.

2.19
Every application for an on-licence, off-licence, or club licence must be accompanied by a certificate from the local authority that the proposed use of the premises meets the requirements of the Resource Management Act 1991 and the Building Code.

2.20
In considering applications for on-licences and club licences, DLAs must consult the Police and the local Medical Officer of Health.9 The Police and Medical Officer of Health must report to the DLA with any opposition within 15 working days of receiving the application. DLAs must follow a similar consultation process with the Police when they receive applications for off -licences, manager’s certificates, and special licences. The consultation process is shown in Figure 1.

Figure 1
Consultation process for liquor licence applications

Figure 1 - Consultation process for liquor licence applications.

2.21
The Act also requires the inspector to inquire into, and report on, every application.

The Sale of Liquor Regulations 1990

2.22
The Regulations prescribe in detail the procedures DLAs must follow when considering applications for liquor licences, and the forms to be used (although the forms may be varied as circumstances require). The Regulations prescribe:

  • the format of application forms for different types of licence;
  • the format of public notices to be published in local newspapers;
  • requirements for verifying that a person is aged 18 years or older;
  • the fees payable by applicants for a liquor licence or a manager’s certificate; and
  • the records to be kept.

2.23
In Part 6 we discuss how DLAs were complying with the statutory requirements of the Act and the Regulations in processing applications and issuing licences.

Alcohol policies

2.24
Several territorial authorities have alcohol policies. These commonly contain:

  • reference to district planning rules governing the permitted location and operation of licensed premises;
  • guidelines for permitted trading hours;
  • information about how applications will be considered; and
  • an explanation of the DLA’s approach to enforcing the Act.

2.25
An alcohol policy has a number of benefits:

  • articulating the community’s expectations about the environment in which liquor is sold and consumed;
  • aligning liquor licensing practice with the community outcomes sought by the territorial authority; and
  • setting expectations for the public and licensees.

2.26
A policy also provides an objective framework for liquor licensing practice, helping to guide decisions about individual applications.

2.27
Finally, an alcohol policy provides an opportunity to specify when the DLA will exercise its discretionary powers under the Act.

2.28
DLAs have different approaches to considering applications for special licences, and policies can explain the process the DLA will follow. Other matters that a policy may cover include requirements for manager training, managing the provision of liquor at public events, or host responsibility practices.

2.29
The Act specifies mandatory licence conditions, but also gives a DLA powers to set licence conditions that are consistent with reducing alcohol abuse. The alcohol policy can set out how the DLA will apply conditions for this purpose.

2.30
The policy can also be used to specify the level of service the DLA will provide to applicants. Some provide a useful summary of the process, explaining the different steps that the Act requires them to follow.

The Liquor Licensing Authority

2.31
The Authority is a judicial body that considers applications to which there are objections. It also exercises powers of review and appeal at a national level.10 The Authority is administered within the Ministry of Justice.

2.32
A DLA must refer any application that is opposed (except for special licence applications) to the Authority. The Authority also determines applications from an inspector or the Police to cancel, suspend, or vary a liquor licence or manager’s certificate. These applications are usually made because of concerns about how licensed premises are being run, evidence of breaches of liquor licence conditions, or, more broadly, a failure to comply with provisions of the Act.

2.33
The Authority hears any appeals against the decisions of a DLA. Its secretariat gives guidance and advice to DLAs on administering the Act.

Roles and responsibilities in controlling the sale and supply of liquor

2.34
Under the Act, there are other agencies with important roles in controlling the sale and supply of liquor to the public. DLAs are required to work with those other agencies in different areas of liquor licensing. Figure 2 shows the roles and functions, under the Act, of territorial authorities, DLAs, the Liquor Licensing Authority, the Police, and the Medical Officers of Health (supported by staff of the public health services). Figure 2 also shows the mechanisms used to carry out the functions that each is responsible for.

Figure 2
Roles and functions under the Sale of Liquor Act 1989, and mechanisms used to carry out those functions

Function Agency responsible Mechanism
Set district planning rules in relation to matters such as location of liquor outlets, traffic, noise, hours of trading. Issue resource consents and approvals under the Building Act 2004. Influence the social and economic environment of their communities. Territorial authorities. District Plan, Resource Management Act 1991, Building Act 2004, alcohol policy, Long-Term Council Community Plan, community initiatives with youth, by-laws prohibiting the consumption of liquor in public places.
Consider applications for and issue unopposed on-licences, off-licences, club and special licences, temporary authorities, and manager’s certificates. Set licence conditions, monitor compliance, and take enforcement action (variation, suspension, and cancellation of licences) through the Liquor Licensing Authority. DLAs, in consultation with the Police. Also in consultation with the Medical Officers of Health for certain applications. Powers under the Sale of Liquor Act 1989.
Considers opposed applications, and applications from the DLA or the Police for variation, suspension, or cancellation of liquor licences. Considers any appeals against DLA decisions. Liquor Licensing Authority, serviced by Ministry of Justice staff. Powers under the Sale of Liquor Act 1989.
Report to the DLA on applications for on-licences and club licences. Promote responsible drinking to reduce alcohol-related harm. Carry out inspections of licensed premises. Promote host responsibility.* Medical Officers of Health. Powers under the Sale of Liquor Act 1989. Carry out health promotion and regulation under contract to the Ministry of Health.
Inspect licensed premises for compliance with the Sale of Liquor Act 1989, with a particular focus on intoxication and sales to minors. Report to the DLA on applications for licences and manager’s certificates. Can seek variation, suspension, or cancellation of licences from the Liquor Licensing Authority. The Police. Powers under the Sale of Liquor Act 1989. Alcohol Action Plan of the Police.

* "Host responsibility", as defined by the Alcohol Advisory Council of New Zealand, refers to a set of guidelines aimed at reducing alcohol-related harm by creating drinking environments that are welcome and comfortable, and where liquor is served responsibly. Host responsibility practices include refusing to sell liquor to minors, providing and actively promoting low and non-alcoholic drinks and food, and arranging safe transport options.

1: See section 4. The Sale of Liquor Act 1989 also set up licensing trusts and set out provisions governing their operation.

2: The Sale of Liquor Act 1989 refers to the Medical Officer of Health. For liquor licensing purposes, public health services staff within local district health boards act in this role.

3: A more precise figure was difficult to determine because the data available from DLAs was incomplete.

4: A club manager’s certificate also allows a person to manage premises where a special licence is in force.

5: Since 1 April 2006, all new applicants for a manager’s certificate and renewal applicants have been required to hold the Licence Controller Qualification. Training providers are accredited by the New Zealand Qualifications Authority. The qualification covers knowledge of the Sale of Liquor Act 1989 and of host responsibility requirements.

6: A designation of "restricted" means that no one under 18 years of age may enter that part of the premises. No one under 18 may be in a “supervised” area unless they are accompanied by their parent or guardian. Anyone of any age may be in an undesignated area.

7: Section 134 also empowers the Medical Officer of Health or any member of the New Zealand Fire Service to apply to the DLA for suspension of a liquor licence where they have reason to believe that a licensee’s failure to comply with requirements relating to public health puts the health or safety of people using the premises at risk.

8: Criteria include meeting certain standards for the buildings and site, policies for providing food and other services, certification of the manager, training, compliance with host responsibility guidelines, and the requirement to meet protocols on advertising and selling liquor.

9: Staff in public health services for the local district health boards support the Medical Officer of Health in performing their functions under the Act.

10: Responsibility for issuing liquor licences was devolved from the Liquor Licensing Authority to territorial authorities by section 64 of the Sale of Liquor Amendment Act 1999.

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