Under new rules in the Sale and Supply of Alcohol Act 2012, supermarkets and grocery stores must restrict the display of alcohol to a single area.
The area should be out of the way so customers do not have to walk through it when doing their general shopping. In 2014, New World Bishopdale's new owner Bond Markets, applied to the district licensing committee for a new off-licence under the new rules.
During the hearing, concerns were raised about the alcohol display being in the general shopping area. But owner Nigel Bond said due to space restraints, there were no other options.
The committee ruled to restrict the area, so Bond Markets appealed the decision to ARLA, which ruled in its favour.
Dr Humphrey then appealed ARLA's decision to the High Court. Justice David Gendall then quashed ARLA's ruling.
After a Court of Appeal sitting, ARLA reconsidered the appeal against the district licensing committee's original 2014 decision in July.
In a recent decision, ARLA said the supermarket's off-licence was up for renewal next year. "The Authority does not consider it in the interests of justice that the parties are put to the trouble and expense of having to renew the licence only to have to do so again almost immediately thereafter."
But Dr Humphrey said ARLA declined to take into account limiting exposure to alcohol, instead taking a pragmatic approach.
"By placing alcohol directly opposite a section of the supermarket which most shoppers frequent, exposure to alcohol, often significantly discounted, will be increased," he said.
He said the High Court victory meant supermarkets were now recognising their obligations when it comes to alcohol sales and having a separate alcohol area.
New World Bishopdale's alcohol sale area had remained the same while the issue was in dispute.
New World South City was originally fighting a similar battle, but because it is redeveloping on a different location, it withdrew its appeal.
Foodstuffs South Island retail general manager Tim Donaldson said it was "very pleased" with the decision.
He said Foodstuffs stores understood the obligations under the current legislation.