Editorial: Liquor rules work against the cause

Editorial

Regulation is hard to get right. The political climate tends to swing from excessive freedom to excessive restriction or vice versa. The regulation of liquor trading became excessively loose in the 1990s and was tightened by legislation passed a few years ago. Now, even operators of charter boats for fishing and social excursions have been told to apply for a liquor licence if they want to serve alcohol or even allow guests to bring their own alcohol on board.

Excessive regulation often has perverse consequences - increasing the very thing is it trying to restrict. The imposition of liquor licensing on charter boats has Auckland waterfront bars worried that when these boats are tied up at their pier, the boats will become small bars in their own right.

That is almost certainly what will happen, because another feature of excessive regulation is the high cost of licences. When the political mood swings against a product such as alcohol, not only is it favourable to toughen rules and restrictions, but there is little pressure to ensure fees and charges are kept reasonable. The regulatory agency, which is often an arm of local government, feels perfectly justified in charging whatever it costs to cover its staffing and procedures.

The Auckland Council's liquor licensing arm charges several hundred dollars for an application, and the same again a year later for a renewal. The licensed premises faces the same renewal fee every three years, and a lesser annual fee between times. The application and renewals cost as much again for public notifications. The premises must also have a licensed manager. The costs of a required training course and application and renewal fees for managers' certificates also run to several hundred dollars at every turn.

These costs might pose little problem for a commercial tavern or a licensed restaurant but, as charter boats have discovered, the regulatory drive knows no bounds. Everywhere liquor is consumed outside private homes is fair game for regulators. Many a small sports club could attest to the crippling cost they face in order to continue providing a beer for their members in their clubhouse. Many of these bars are so small and infrequently open that they hardly warrant the name.

But if the club wants to recover its bar's licensing costs it has to increase the bar's turnover. There are sports clubs in Auckland that run events mainly to support their bar. Managing and staffing the bar becomes too time-consuming for unpaid club volunteers and so the costs and scale of the operation grow. A law intended to limit liquor outlets has had the perverse effect of turning places where liquor sales were small and incidental to healthy pursuits into yet more commercial bars.

It is hard to get regulation right but surely not impossible. If it really is necessary to control the sale of liquor down to the level of a suburban sports club or a recreational charter boat, then the costs imposed need to be more carefully calibrated to the scale of the enterprise. Otherwise, these boats will likely indeed become floating quayside bars.