From '6 o'clock swill' to 24 hour trading.
Liberalisation and control of licensing hours in New Zealand

by Linda Hill
Alcohol & Public Health Research Unit, Department of Community Health, Faculty of Medicine & Health Science, University of Auckland, New Zealand.

Legislative control over the sale and supply of alcohol, and the way legislation is implemented, has important consequences for the health of individuals and for society as a whole. The regulatory framework helps create the social climate and physical environments in which we drink, and can influence the extent of alcohol related harm. In 1989 New Zealand's traditionally restrictive regime was overturned by a new Sale of Liquor Act. Liquor licences are now readily obtained by a wider range of premises. Hours of trading are set licence by licence, and may permit 24 hour, 7 day a week availability.

Liberalising licensing

Tension between the social pleasures and the social consequences of alcohol are part of New Zealand's political history. High levels of drunkenness among a disproportionately male colonial population helped produce a strong temperance movement around the turn of the century, and liquor licences for very restricted hours of trading became the main mechanism for state regulation of the sale and consumption of alcohol. A result of this was the '6 o'clock swill', an all-male ritual of rapid beer drinking between 'knocking off' work and close of trading, which continued until 1966. Under the 1962 Act, it had to be argued before a Licensing Control Commission that any new liquor outlet was 'necessary or desirable' to meet the requirements of the public. By the mid 1980s commentators were pointing out that, while this restrictive regime recognised the need to control distribution of a potentially harmful substance, its effect had more often been to provide for economic regulation and protection of the liquor industry. Restricting the market in alcohol had created local monopolies, and licences themselves had become saleable commodities, transferable between localities.

It was this market in licences, dominated by the two main breweries, that was dismantled by the Sale of Liquor Act, 1989. Under the new regime, licences are granted to any applicant with planning consent unless shown to be 'unsuitable'. As a consequence the market for alcohol as a product has expanded and become more competitive but, as stated in the object of the Act, continues to be subject to 'a reasonable system of control with the aim of contributing to the reduction of liquor abuse'. In fact, regulation of some aspects of management of licensed premises was increased, in particular through a requirement to provide food and non-alcoholic drinks and reporting on premises by local inspectors, police and public health/health promotion officers. In the cities café-bars, licensed as restaurants, have replaced most of the old-style hotels and taverns, with the breweries moving out of pub ownership to focus on sales of beer, spirits and some wines, including retailing through their own off-licence chains.

Hours of trading

Restrictions on hours of trading were also overturned by the 1989 Act. Previously 'usual hours' of taverns and hotels were limited by statute to 11 am to 10 pm, but the then local licensing committees could from time to time extend these hours if 'in the public interest to do so'.

Under the 1989 Act daily hours of trading are set for each licence on application by the licensee and are entirely at the discretion of the Liquor Licensing Authority, which replaced the old Licensing Control Commission. An extension of these hours can be obtained in the form of a 'special licence' for a particular occasion.

Pubs and off-licences may not sell alcohol to the public on Sundays and on certain public holidays, but restaurants may - and the liberalised licensing regime has greatly increased the number of restaurants which have liquor licences. A distinction is made in licences allowing sale for consumption on the premises between 'taverns' whose primary business is selling alcohol (with entry restricted to those over 20) and 'restaurants' that may sell alcohol only with meals (to anyone over 18 or with a responsible parent, guardian or adult spouse). This contributes to the popularity of licensed cafes, which tend to blur this distinction in ways which taverns consider unfair. Restrictions on Sunday trading may be removed by legislative amendments later this year.

Initially, in the new deregulatory climate, applications for 24 hour licences were granted and trade organisations encouraged licensees to apply for these whether or not they intended to use them fully. An early Authority decision set the scene nationally by granting a licence to 3 am.

By mid 1993 the Authority recognised that: 'the extension of hotel and tavern closing hours from 6 pm to 10 pm [in 1996] and subsequently to 1 am or 3 am over a 26 year period has been too drastic a change to sit comfortably with some local authorities, community boards and citizens - especially in some smaller communities.'

As a rule of thumb, 3am is now being considered a reasonable closing time for most premises in areas zoned for commercial use. Hours of trading are the only matter on which the Authority may consider neighbouring land use. Where neighbours lodge an objection the Authority is likely to set a closing time between 11 pm and 1 am. In smaller towns licensees are frequently not interested in working late hours for little return. In the cities and larger provincial towns, premises trading as nightclubs are likely to seek and be granted a closing time of 5am or later. In the large city centres inspectors report a limited number of 24 hours licences, not all of which make full use of those hours. Those which do are likely to be the well-run international hotels, or premises seeking a late night advantage in what is now a highly competitive market.

Problems from late night trading

Location of drinking is an important predictor of alcohol related harm. In New Zealand, hotels, taverns and clubs are the licensed venues in which young men do most of their public drinking. A third of the heaviest drinkers are young men aged 18-24 and this group reports most problems, such as getting into a fight or drink driving. In many districts police charge sheets for drink driving (and in some areas for all offences) ask where the last drink was taken, as a way of identifying 'problem premises.'

In most modern cities, a peak in violence and road trauma occurs shortly after midnight. Research in Western Australia has shown that assaults in 'taverns' peak earlier than late night dance premises, which in turn peak earlier than those in private settings. When closing times are delayed, crime and road crash peaks are delayed to a similar degree. In New Zealand, five years on from the liberalisation of licensing hours, random breath alcohol testing has helped reduce drink driving. In interviews in 1995, however, some police reported experiencing not just a delay but an increase in street disorder associated with late opening premises. In their view, drinking over longer hours was resulting in increased levels of intoxication, and increased problems requiring police attention. As one licensing sergeant expressed it: "The publican kicks them out, shuts the door, that's the end of his problem. We've got to deal with the fights as they meet going from pub to pub, wilful damage as they throw beer bottles through windows, they're so drunk that they just urinate in a doorway."

However, some police saw a positive side to premises now remaining open until 1 or 2am. With later closing times, young people in particular tended to go out later. Previously when the pubs closed at 11pm, young men had gone on to drink at private parties, where police had little right to intervene. Now, police noted, they remained longer in a controlled environment and were then usually content to go home.

Closing times now differ from licence to licence. Some police preferred not to have all drinkers coming out onto the street simultaneously, but most referred to the problem of the 'migrant drinker'. As one pub closed, patrons would move on to another with later closing hours. The last opening tavern was likely to attract already intoxicated patrons. Some less profitable and poorly run premises sought later hours of trading in order to attract this business, and were likely also to be associated with serving minors.

It is widely asserted that problems arise when premises are poorly managed; late night hours of trading should not be considered a problem in themselves. Health promotion officers offering 'host responsibility' training to managers and staff point out that profits are to be made by providing a safe and enjoyable social experience, and by providing food and entertainment as well as alcohol. This is certainly the direction of many successful premises under the liberalised licensed regime. In the view of one public health officer, however, changes in the style of many premises under the new Act represents an extension of market opportunities, rather than changed behaviour in all New Zealand drinkers.

Australian researchers have noted that most violence in and around licensed premises involves young, single males who may enjoy watching or taking part in violence and street disorder. Such a 'top night out' is likely to be sought at places with late hours of trading.

Cutting back trading hours of problem premises

Hours of trading are one of a limited number of set and discretionary conditions which the Authority may attach to a licence, which are not open to review by the High Court. The principle underlying the new Act was that licences should be 'easy to get, easy to lose', but in its first years the Authority was reluctant to suspend or cancel licences, as this would deprive licensees of their livelihood. This was partly because the Act allows appeals against Authority decisions and until an amendment in 1996 trading could continue until the appeal was heard. It was also because the Act did not make clear provision for minor sanctions. Over the years, however, the Authority has developed ways of responding as flexibly as possible, within the framework of an Act designed to limit the extensive discretionary power held by the previous Licensing Commission.

Hours of trading are the area of greatest discretion allowed the Authority. Statutory officers found that an application to cut back the hours permitted by a licence was the most effective means of dealing with premises associated with problems such as selling liquor to minors, serving intoxicated persons, disproportionate representation on the local last drink survey, or complaints from neighbouring residents and businesses. In some cases, loss of late night hours was reported to have led to closure. Such an approach had considerable merit, given that first two licence cancellations, for extremely unsatisfactory late night bars, took two years to achieve.

Planning local licensing hours

In a number of localities, community concern about the longer hours of trading for licensed premises has made liquor licensing a town planning issue in local politics.

District plans already restricted hours of retail trading in residential zones to 11 pm, which for licensed premises was in line with the 'usual hours' set by the previous Act. Shortly after the new licensing Act, another new Act, the Resource Management Act 1991, introduced a new planning regime. The key criteria for granting a liquor licence are licensee suitability and planning consent. The Liquor Licensing Authority and legal commentators see the Sale of Liquor Act as primarily concerned with how licensed premises are managed, and consider location to be a planning matter. It is a purpose of planning to anticipate any impact on local communities, and to take their wishes and concerns into account. However, planners have not been accustomed to consider the sale of liquor in planning the development of local communities. District plans tend to regulate future land use by zones, whereas issues of concern to a community may relate to a particular site.

Under the Sale of Liquor Act objections may be made by individuals with 'a greater interest than the public in general' to the suitability of the licensee or on those limited grounds that the Authority may consider in setting the terms of the licence. As noted, the Authority may consider neighbouring land use only in relation to hours, but not whether the licence should be granted at all. Nor may it set licence conditions in response to concerns, other than those listed in the Act. In its first years, the Authority tended to grant the requested hours and advise objectors to present evidence of adverse effects or unsatisfactory management at the time of renewal. More recently, it has used its ability to set hours of trading as the only means at its disposal to respond to the concerns of neighbours. In its 1996 and 1997 reports to Parliament, the Authority expressed a wish to respond to the social concerns expressed by objectors but said it was powerless to do so satisfactorily. It asked legislators to consider allowing it discretion to refuse a licence on grounds other than licensee suitability, and to extend criteria to consideration of the object of the Act - that is, contributing to the reduction of alcohol related harm.

Dissatisfaction with these processes has led to political agitation in a number of localities about hours of trading and the location of licensed premises. Pressure from the public and local police has led a number of councils to adopt policies on maximum hours of trading for licensed premises in commercial as well as residential areas. Provided such policies are adopted by the full council, these are now respected by the Authority, in anticipation of incorporation into a District Plan. New District Plans are gradually being formulated under procedures laid down in the Resource Management Act but, as objectors are finding, planning consent for a pub or bottlestore cannot be denied unless the sale of liquor is a business activity which is specifically restricted by the District Plan. This may be done by making the sale of liquor 'a notifiable land use', meaning that an application for planning consent would trigger a public hearing. The provisions in the Resource Management Act on public notification and public objection are wider than those in the Sale of Liquor Act. The only improvement suggested by a 1996 review of the Sale of Liquor Act was a requirement for a public notice on the site be as well as in the local newspaper.

Conclusion

The liberalisation of licensing under the 1989 Sale of Liquor Act has led to change, not only in the number, but in the style of public drinking. The present focus on the way premises are managed offers opportunities to reinforce server practices which research has shown to be effective in influencing levels of intoxication and behaviour. Legislative amendments in late 1996 and additional ones scheduled for late 1998 or early 1998 to clarify and strengthen the Act are likely to enhance regulatory credibility. Whether other liberalising proposals - to lower the drinking age from 20 to 18-with-ID and to allow all premises to trade on Sundays - will survive the Parliamentary 'conscience vote' process remains to be seen.

The response of a number of communities to extended hours of trading is salutary. It is clear that many New Zealand communities do not regard alcohol as just another product, and the sale of liquor as just another business activity. Despite being administered and enforced at the local level, the 1989 Act makes little provision for control over licensing decisions by local communities. But a wish for such control remains. Where objections to late hours of trading, the siting of premises, and other concerns do not meet a satisfactory response, local concerns may be displaced to another arena of decision making which offers opportunity for local community control.

Open all hours In the UK round the clock drinking has been proposed by the Better Regulation Task Force, chaired by the newly- ennobled chairman of Northern Foods, Chris Haskins. (see back page Alert comment). George Howarth, the Home Office minister, has already stated the need for a overhaul of the licensing laws and will take the task force's views into consideration when he issues the document outlining the government's thinking in the autumn of 1999. Lord Haskins condemned the "high moral tone" of the present laws. Mocking the idea that it was all right to be served an alcoholic drink at 10.15 pm but not an hour later, he said, "Putting everybody out on the streets at 10.30 pm just means that in the previous 45 minutes people drink too much." The experiment of 24-hour opening has already been tried in New Zealand. In her article we publish here, Linda Hill, of Auckland University, explains the pitfalls of such a scheme.