Hospitality industry news

LIQUOR REFORM

A Hospitality Perspective

October 2010

One of the aims of the Law Commission’s recommendations on changes to the Sale of Liquor Act was to change New Zealand’s attitude to alcohol. I would like to address the proposed change in legislation on the basis of the legislation making a difference to the way people drink.

I would like to start with some broad assumptions:

1) The hospitality industry is in favour of encouraging responsible drinking and we want to support initiatives that discourage binge drinking and drinking that does harm to the youth.

2) The hospitality industry‘s standards and regulation has improved dramatically over the past 10 years.

3) In the last 30 years, the average alcohol consumption per person (despite deregulation, lower pricing and more advertising) has actually declined slightly, so the problems we are dealing are no worse or better than they were 30 years ago.

4) The vast majority of people drink responsibly.

5) Over 70% of alcohol consumption occurs outside of regulated licensed premises.

Age

The age debate has raged on for some time. Currently NZ has a purchasing age of 18, but no current ‘drinking’ age. The hospitality industry has advocated adopting a drinking age of 18 as this puts the control of drinking firmly in the hands of the parents and guardians. I have a 19 year old daughter and a 15 year old son, and there are times where I have not been in control.

The government has proposed retaining a purchasing age, with a split age 18 for on-premise and 20 years old for off-premise, and introducing stricter rules about who can purchase alcohol on behalf of an underage person. Whilst the industry thinks the move by the government to encourage 18 to 20 year olds to be entertained in bars/clubs & restaurants rather than socialising in unregulated environments, we do not think the change will make a huge difference.

Supermarkets & Price

The decision to allow supermarkets to sell beer and wine has had a big impact not only on the hospitality industry, but also, and more dramatically, on the way people drink.

1) Supermarkets use beer and wine as a means of competing, so they sell the product at 1% or2% above cost. Most weeks it is cheaper for my business to purchase beer and wine from the supermarket than it is to purchase from the manufacturers.

2) The lower pricing is forcing discounting from the traditional bottle stores, and the knock-on effect is more discounting from the bars and restaurants.

3) Lower pricing has encouraged ’pre-loading’ by mainly younger people. This causes a major problem for the police and the hospitality sector as we are often held accountable and responsible for their actions and behaviour once they get into entertainment areas in town.

4) Lower pricing has encouraged more alcohol consumption in the home environment. This counters the $6 price gap between the cost of a drink in a supermarket/bottle store and a bar/restaurant.

Unfortunately the government has done nothing to address the issue of supermarkets and or supermarket pricing. As a comparison, in Australia the supermarkets have chosen not to compete on price.

Personal Accountability

How do we expect to change behaviour or people’s attitudes if there is no personal accountability or responsibility? The current and future legislation holds the on-license holder accountable for an individual’s behaviour whether it is an underage person trying to purchase alcohol or if it is an intoxicated person in a licensed premise. People are not encouraged to do things differently if there is no accountability.

Accountability needs to be run in conjunction with education, parents’ friends setting a good example and also possibly a reward. We can look back at New Zealanders’ attitude to drinking and driving that has changed so much over the last 10 years, due to a combination of harsh penalties and good education. The same should apply alcohol consumption.

I believe that fining a bar owner for having an intoxicated person in a bar is the same as fining a home owner if their house gets broken into for not having adequate security. Now before you tell me that people who have been drinking cannot make rational decisions, firstly I think that any rational decisions need to be made before the drinking starts and, secondly, as an industry we must be prepared to share responsibility with the individual to encourage responsible alcohol consumption.

Once again the government has just ignored this opportunity to make a difference.

Make licenses harder to obtain & easier to lose, Giving councils more power and Trading hours

Minister of Justice Simon Power is fond of stating that liquor licenses will be harder to get and easier to lose. The hospitality industry can live with the notion that licenses will be harder to get, but we are very concerned with the concept of the ‘3 strikes you are out’. There are two reasons for this. Firstly, having more control by a council makes the management of licenses very subjective and, secondly, in situations where a business invests large sums of money in renovating or upgrading a venue you do not want to leave anything to chance. Let’s look at some statistics for one of Trinity’s outlets, Wellington’s Cambridge Hotel.:

12 month period		Cambridge
Customers through the door		45,000
Free meals served (Wednesday BBQ)		6,500
$2 breakfasts sold/$10 lunches		15,000
Coffee sold		9,500
Quiz/Comedy/Poker/Live entertainment		156
Live sport on TV	Hours	5,400
Police/Council inspections		156
IDs/Under age people turned or ejected		1,050
People refused access to the bar		2,500

And yet we can have our doors closed if the police find one under aged person and/or intoxicated person. And we risk losing our license if this happens 3 times in 3 years.

We want to avoid over-regulation.

Trading hours: The government has proposed these be restricted to 8am to 4am. Trinity Group has a few issues with this. A number of Wellington sites open for breakfast at 7am; under the new legislation we will not be able to open our doors until 8am.

Whilst I personally do not go out very often after 2am, there are a number of people who enjoy listening to live music, international DJs or other entertainment in the early hours of the morning. If there was not the demand businesses would not open. In a free society we need to recognise one size does not fit all and the law must cater for everybody. Closing earlier does not make a big difference as Pamerston North has a 3am closing and still the younger market arrives at about 12.30 to dance.

Conclusion

We believe the government has set itself an impossible task. It has tried to make a difference, but we do not expect much change in behaviour because the proposed legislation has not addressed some of the hard issues that will not be popular coming into an election year. Our concern is that the on-premise sector will become over regulated and nothing will be done about the majority of issues that occur at home.

Jeremy Smith

Trinity Group Holdings

Jeremy.smith@trinitygroup.co.nz

News Release 23 August 2010

Proposed alcohol reforms very Tepid

says Wellington hospitality group

Wellington hospitality company, Trinity Group, says the government’s announcements on alcohol reform are very tepid.

Jeremy Smith, Trinity Group’s managing director, says, “We’re pleased that the government wants to increase the age that young people can buy alcohol from off-licences from 18 years old to 20. Trinity also supports what looks like a government compromise in retaining the current alcohol purchase age in an on-licence at 18 years old. Licensed premises encourage eating, drinking and socialising in a pleasant and controlled setting, under the supervision of experienced staff and other adult patrons.”

The government wants to restrict opening hours for licensed premises from 8am to 4am the following morning. Jeremy Smith says, “This proposal has some unintended consequences as many on-licenses open early to serve breakfast. Making it illegal to open until 8am shows the government’s lack of understanding of the environment in which licensed premises operate. We don’t open just to sell alcohol. Running an on-license means providing a social and hospitable environment in which our patrons enjoy having a meal – whether it is breakfast, morning coffee, lunch or dinner – irrespective of whether they have a drink or not.

“The proposed restrictions of on-licence hours will also have a major impact on the screening of live international sports events that, due to the international time differences, are watched at times that frequently fall outside those prescribed hours. Yesterday’s Tri-Nations rugby game between New Zealand and South Africa screened at 2.30am-5am is a good example of that.”

The government has also indicated that liquor licenses will be more difficult to obtain and easier to lose. It wants to introduce a ‘three strikes and you’re out’ regime where a bar owner or operator can lose their license after three prosecutions for, say, serving an under-age drinker whilst the offender will not be held responsible.

Jeremy Smith adds, “Our major disappointment is that the government is not encouraging personal responsibility and accountability. Underage drinkers should be prosecuted and fined for offences such as presenting false ID. The onus should be on the person buying alcohol to prove their age and responsibility, not for the bar owner to be prosecuted, and perhaps ultimately lose their licence, for serving someone whose ID appears to be legal. It simply does not pass the fairness test.”

. . . / 2

Trinity Group is frustrated that the government has not introduced measures to make it illegal to be intoxicated in a public place. It believes the government has missed the opportunity to send a very clear and powerful message to all New Zealanders, that intoxication, wherever it occurs is unacceptable.

Trinity Group says that whilst a good start has been made on alcohol reform, it believes the government has not gone far enough. “Making drinkers more responsible and accountable for their behaviour and not accepting irresponsible drinking must be urgently addressed. The government must take that step to ensure we have well-considered and fair alcohol legislation. This is the one chance New Zealand has to get it right, so the government must ensure that it does,” says Jeremy Smith.

Jeremy Smith - Managing Director, Trinity Group Holdings

Trinity Group Ltd: Background

Trinity Group is a specialist hospitality company based in Wellington. It owns and operates bars, restaurants, bottle stores, and hotels and motels in the lower half of the North Island; it also owns and operates two resorts in Vanuatu.

Trinity Group hosted a public forum on Tuesday, 27 July at Wellington’s St Johns Bar that put forward its views on the Law Commission’s recommendations. Led by Jeremy Smith, the Hon Peter Dunne, Leader of United Future Party and Associate Minister of Health and Gerard Vaughan, CEO of the Alcohol Advisory Council of NZ also spoke at the forum before it was thrown open to the floor for questions and commentary.

Trinity Group is a supporter of www.drinkresponsibly.co.nz

19 July, 2010:

Hospitality group takes on Law Commission - Responsible drinking: who’s responsible?

Bars and restaurants are being blamed for a youth binge drinking culture, when the real culprit is the failure of personal responsibility, says Jeremy Smith, managing director of Trinity Group, which owns and operates bars, restaurants and bottle stores mostly in the lower North Island.

Whilst Trinity Group concurs with some aspects of the Law Commission’s May report “Alcohol in our Lives; Curbing the Harm”, it strongly opposes the recommended raising of the alcohol purchase age to 20 years of age.

Jeremy Smith says, “The hospitality industry is tired of being blamed for the excess drinking of young people. There are too many under-18s who are supplied with alcohol by friends and parents, and their bodies and minds are not mature enough to cope with it. We believe a minimum drinking age of 18 years old should be set which would match the current alcohol purchase age of 18.”

Establishing a minimum drinking age of 18 would help parents set limits around their children’s behavior and help them enforce those limits. It will put the control of distributing alcohol firmly back in parents’ hands.

“Around the world countries have a mix of purchasing and drinking ages. We believe that New Zealand should take a leadership role and have 18 years old for both the purchase and the drinking age. In New Zealand, at 18 you are an adult. You can vote, enter into contracts, apply for a credit card, join the police and make a Will. It should also be the age that you can legally drink and buy alcohol,” says Jeremy Smith.

Trinity Group wants to encourage personal responsibility and accountability. Trinity wants it to be an offence to be intoxicated in a public place and in licensed premises, for under-age drinkers to be prosecuted, and to not allow underage people entering licensed premises unless they are accompanied by their parents or guardian.

“The vast majority of people who drink, do so responsibly. Those who don’t, or can’t drink sensibly and within the law, should be held responsible for that behaviour and they should be penalised. Without making a drinker accountable for their conduct, the foolish behaviour and the binge drinking mentality embraced by a minority of drinkers will not change,” says Jeremy Smith.

“News coverage of intoxicated young people in central city ‘entertainment centres’ has created a perception that bars, restaurants and other licensed premises are responsible for this bad behaviour. This is not the case at all, there are already heavy penalties for licensees who serve intoxicated people,” says Jeremy Smith.

“In fact more than two thirds of alcohol is consumed at home or at friends’ places, not in licensed premises 1. There’s ample anecdotal evidence that drunken teenagers have got into that condition by ‘front-loading’ before coming into town. Licensed premises are already highly regulated, well-managed and policed. They provide a supervised environment that prohibits them from selling alcohol to intoxicated people, and irresponsible drinking is not acceptable or tolerated.”

‘Youth’, ‘binge’ and ‘alcohol’ are topics constantly hitting the headlines. The hospitality industry provides a socially appropriate alternative to a drinking culture that urgently needs stamping out.

“Keep the alcohol purchase age at 18, and introduce a drinking age for 18 year olds and over. Make drinkers accountable and responsible for their behaviour. It’s our investment in the future of New Zealand – we owe this to young people,” says Jeremy Smith.