Ill-will ferments over licensing

By SIMON COLLINS

A showdown is looming between the forces of competition and three community-owned Auckland liquor trusts which are vulnerable to charges of extravagance and inefficiency.

The three trusts - Portage, Waitakere and Birkenhead - are among the last seven trusts in the country which still have a monopoly of liquor sales in their areas (the other four are in the South Island).

But in supporting the closure of competing licensed restaurants, the trusts have bought a fight.

Two of those who have been closed down - Dean Murphy of Murphy's Bar & Grill in New Lynn and Barry Waterton of the Korner Restaurant in Kelston - are launching a petition to force a referendum on the trusts' monopoly.

Another who is being taken to court, Auckland Regional Council member Carl Harding of the Thirsty Rooster in Glendene, is threatening to resign from the Labour Party over the issue.

And the trusts are vulnerable. For example:

* All Waitakere trustees and half the Portage trustees went to Sydney's annual gambling expo last year. The secretary of both trusts, Ian Caulfield, says he cannot disclose the cost.

* Liquor prices are, at best, no cheaper than average. Portage president Bill Buchanan says a trust survey last month found trust prices were cheaper than in city supermarkets in some lines and dearer in others. But Mr Murphy says wine selling for $5.95 in a city supermarket was selling recently for $9.95 in a trust store.

* The Portage Trust has proved unable to prevent 46 attempted robberies of its Richardson Tavern in Owairaka, including three armed holdups.

"We are living in the Dark Ages," says Mr Murphy. "We just have to get rid of the trusts and get into the 21st century."

Even Portage's founding president, former Labour MP Ralph Maxwell, says the rationale for the trusts being there no longer really exists.

When the trusts started in 1972, he says, hotels made big profits despite their low standards.

"It's a whole different kettle of fish today. It's not a licence to print money, and the opportunity is there for smaller operators [because] it's not as regulated."

The remaining trust monopolies have looked shaky since wine was let into supermarkets in 1996. Seven trusts down south have voted to open their areas to competition.

This year Eden and Roskill, which voted to go "wet" last year, have rejected trust control - although support for a trust reached 41 per cent in Eden and 47 per cent in Roskill.

The trend is so clear that last year the National Government introduced a bill to scrap the last seven local monopolies by legal fiat.

The present Minister of Justice, Phil Goff, said competition was inevitable given the changes that had occurred in society.

However, Labour MPs will have a free vote. The select committee on the bill will hear submissions at Henderson's Dalma Court Motor Inn on Thursday.

Labour president and Waitakere mayor Bob Harvey, who chaired a meeting of the West Auckland MPs in Wellington last Tuesday, says: "I would advocate for a referendum and ask the people of the West what they want."

Titirangi MP David Cunliffe believes the provision to scrap local monopolies compulsorily will not get majority support.

"If the Labour and Alliance caucuses were briefed beforehand on the fact that an option to have a local referendum was defeated by hardliners, I think the reaction to that would be to say 'sorry, we don't operate in that way'," he says.

Prime Minister Helen Clark, whose Mt Albert electorate includes part of the Portage Trust area, is "aware of the issue," he says.

Mr Buchanan says that when people voted for trust control in 1972, they were saying that locally elected trustees - not private publicans - should control the profits from liquor and, by implication, poker machines.

Trusts say that 80 per cent of the grants which owners of private pubs make from their poker machines go to sports clubs - which often recycle their grants into drinks at the pubs that support them.

In contrast, sport got only 14 per cent of the $2.2 million distributed by the Waitakere trust in the year to March, and 15 per cent of $674,000 from the Portage Trust.

Both trusts gave more than 30 per cent of their grants to community and welfare groups, and 16 to 25 per cent to educational groups.

Trust presidents Mr Buchanan and Ross Dallow (Waitakere) say it is the police who are closing licensed restaurants.

The officer responsible for liquor licensing in West Auckland, Constable Leigh Boyle, says: "It's fair to say that the police are getting tougher."

"For the past 21/2 years I have been doing liquor licensing. Prior to that it was just added on to another person's job, so there is a lot more emphasis placed on it. Now there is a fulltime job - that's all I do."

Murphy's Bar and the Korner are the first businesses to lose their liquor licences in the West since 1993. The Liquor Licensing Authority found both were de facto "taverns," with food being less than 26 per cent of their revenue.

These cases have set benchmarks which the authority is likely to follow in pending cases against the Thirsty Rooster and a Henderson Valley Rd business, the Bullock and Vine.

Constable Boyle rejects suggestions that trust hotels such as the Te Atatu Tavern are violent "black spots."

"I think they are run as well as any other licensed premises."

She says it is not the trust's fault that the Richardson Tavern has suffered three armed robberies.

More controversially, Mr Dallow defends the trustees' annual trips to Sydney on the basis that they have to keep up with gambling trends.

Trust member Carolynne Stone sees the trips in the context of the trustees' annual incomes from the trust of only $3000 to $4000.

"That really is part of the package," she says.

It is hard to measure the trusts' efficiency. An industry analyst estimates that profits before interest and tax in private liquor chains are down to around 2 per cent of gross revenue.

"It's a high-volume, low-margin business," he says.

In that context, he says the Waitakere and Portage Trusts' pre-tax profits of 4 per cent of their gross revenues in 1998-99 look "positively ritzy."

None of this, of course, is any satisfaction to Mr Waterton or his four full-time and six casual workers who lost their jobs at the Korner.

Last Thursday, Mr Waterton revealed how he gave out $410,000 in poker machine profits in the Korner's one-year life.

He decided the money should go to children, so he rang round the heads of the 11 local schools.

"With the first one, I just said to him, 'How would you like $10,000'?" Mr Waterton says. The principal "couldn't believe it."

His other grants were to sports clubs which cater for children.

To force a referendum, Mr Waterton and Mr Murphy need the signatures of 15 per cent of electors - 5694 people in Portage or 9612 in Waitakere.

If they get their numbers, voters will have to decide whether they want private businesses such as Mr Waterton's sharing in both the sale of liquor and the distribution of gambling proceeds in the area.

But that's only if MPs don't take the decision out of their hands.