Claims Auckland Council's 'unlimited' food, liquor licenses 'killing hospitality' in Auckland

Renee Coulter, owner of Coco's Cantina restaurant. Photo / Michael Craig

The owner of a popular Karangahape Rd restaurant says Auckland Council's unlimited supply of food and liquor licenses in the country's largest city is having detrimental effects on the hospitality industry.

Pressures around staffing and fierce competition would be eased if Auckland Council limited the number of licenses it issued for cafes, restaurants and eateries, as is done in cities overseas, says Renee Coulter, the owner of Coco's Cantina, a popular family-owned restaurant.

Auckland's hospitality industry is bustling - but not how it should be, Coulter told the Herald.

"Last year was particularly hard to secure staff, but especially in the kitchen, and this year I don't see it being any different," Coulter said, adding that her business is one of many in the same situation.

The restaurant had reduced its opening hours as a result as it could not find enough staff.

Coulter believes there are now too many cafes and restaurants in Auckland, which was causing significant staffing issues within the industry and crippling the local industry.

"There's too many dining establishments, and that's not me being a big cry baby. I love the fact that K Rd is kicking a** and we have, I believe like many people do, got the best dining precinct in the city and you can go anywhere on K Rd to get amazing food.

"But the flip of that across the city is that Auckland Council has distributed literally hundreds of dining (food and liquor) licences over the last few years, and they have added thousands of dining seats."

Newly developed Westfield Newmarket's rooftop dining precinct is now open and Commercial Bay will this year open its expansive Harbourside food hall. A few years ago dining in Wynyard Quarter was revamped.

Even without the big projects, the number of retail spaces on main shopping strips that had been converted to hospitality in the past two years was astronomical, Coulter said.

"If you we're to walk a strip of shops anywhere in Auckland, [you'd be able to] go, 'two years ago that was a retail shop and now it has been transformed into a hospitality space'."

Restaurants only make money when they are running at capacity. That's when they are able to pay competitive wages, she said.

"Every time I talk to a supplier, every time I talk to one of my peers, everyone is putting on a brave face ... we're not doing good as an industry, everyone is completely strung out, no one has enough chefs."

Coulter said hospitality owners were working harder now than they were two years ago to stay afloat and because they could not get enough staff. "I'm sure every small business is going through it, but hospitality in particular, we're being completely hammered on every end.

"It's competitive to the point where people aren't actually making money, they are just staying trading so that they don't go under."

Hospitality

Coulter, like many business owners, was too busy working "in the business" as opposed to "on the business" due to not being able to employ enough staff.

She would like to see the number of food licences granted in certain areas of Auckland capped, and the government better represent the industry, outside of the tourism portfolio.

"In cities in Australia and Spain, you can't just keep opening restaurants, there is a cap, and they say if you want to open a restaurant 'go and buy an existing one'.

"I don't know who's in charge of our industry, it feels like it is being driven by landlords, property developers and malls," she said.

"You can't keep adding and adding, and expecting it not to have an impact."

Krishna Botica, co-owner of restaurant group Comensa, which operates Auckland eateries Cafe Hanoi, Saan and Xuxu Dumpling Bar, said some form of regulation within the industry needed to happen, and a potential cap to licences in certain areas could be beneficial.

"I certainly think there's merit in looking into, whether they could come up with something that was accurate and fair, I think there is a larger question mark over that.

"There shouldn't be any reason why they wouldn't investigate how to go about it and go out to the various associations and try to develop something within the industry that people felt was appropriate - there would be a lot of things to consider."

Restaurateur Krishna Botica. Photo / File

Unlimited number of licences put an "undue pressure on the industry", Botica said.

"Everybody who lives in Auckland, I think, finds it hard to keep up with all the new eateries so you end up creating a dining culture which is people racing to the latest and hottest thing and then diving off to the next one, giving restaurants a very limited time to develop relationships.

"I think the whole industry is far more transactional than it used to be say 10 years ago because of UberEats and because of the number of businesses opening. But also, there is that element of increased competition means increased product and survival of the fittest."

Auckland Council moved away from regulation in the 1980s to an "open market" model, and there is currently no limit to how many licences can be active in certain areas of the city at any given time.

Auckland Council issued 3120 food licenses last year. Of these, just under a thousand - 996 - were for new businesses.

The Council declined the Herald's request for an interview, but in a statement said food and alcohol licensing legislation did not consider "the economic viability" for businesses.

"The Food Act only gives Council the power to regulate the safety and suitability of food premises."

Coulter does not believe the open market rules were working for the industry: "We're being told everything about how to look after our people, how to run good businesses but we've still got this crappy model that isn't allowing it."

Close to 7000 hospitality businesses operate in Auckland city. Nationally, the sector employs about 130,000, and combined with tourism contributes $15.9 billion, or 6.1 per cent of GDP. It is the country's biggest export industry, contributing 21 per cent of foreign exchange earnings.

Coulter and Botica, along with Hospitality NZ, would like to see a minister appointed specifically for hospitality to oversee dealings and issues within the sector. Currently, hospitality falls within the tourism portfolio.

Hospitality NZ Auckland president Russell Gray said having a minister dedicated to hospitality was necessary and would be beneficial.

"Taking [hospitality] out of the tourism portfolio would be a very good start - you can not lump them in together anymore", given the size and attention both needed, Botica said.

"Hospitality and tourism, while inextricably linked, are not necessarily similar industries by any stretch."

Gray, however, does not believe that Auckland Council should limit the number of licences it grants for hospitality businesses.

The Restaurant Association is monitoring the idea.

A recent survey conducted by the Restaurant Association found that 65 per cent of its members believed that there were too many food businesses trading in New Zealand.

The industry is, however, 50:50 split on whether limiting operating licenses would ease the pressure.

The hospitality sector has grown so much that it now warrants its own ministerial focus, some restaurant and industry leaders say. Photo / Rebecca Zephyr Thomas

"Auckland continues to grow, we've got the America's Cup coming which is a significant extravaganza for the city so I think that it's important that we continue to encourage good hospitality to expand rather than looking to cut back," Gray told the Herald.

"Government does need to do more relative to the clean-up processing times for visas for immigrants that are wanting to work in hospitality. We rely heavily on an overseas workforce to provide good hospitality services so we just need that relaxed and sped up."

Restaurant Association chief executive Marisa Bidois agreed that there was significant pressure on the hospitality industry currently.

"Whilst some see the advantages to their current businesses in reduced competition, others feel that this would ultimately limit creativity and opportunity," Bidois said.

"Competition can be a good thing and those managing their businesses well will come out on top. Whilst its true that the industry is challenged, we also have a number of members who are growing and expanding their businesses.

"Whilst we continue to monitor the idea of a cap, we are mindful of the potential limits this could put on creating valid opportunities for new owners."