Northern Territory prepares for minimum unit pricing

28 September, 2018 by Deborah Jackson

This column was submitted by Julie Ryan, the CEO of the Australian Liquor Stores Association, for the October issue of National Liquor News

Last month I had the pleasure of joining Faye Hartley, President of Liquor Stores Association of the Northern Territory (LSA NT) on store visits in Darwin. Seeing first hand the work ethic and resilience of LSA NT members (and non-members) was incredible and a testament to the culture of small business to battle on through difficult environments.

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It is fair to say that NT presents unique social and cultural issues, and these need to be tackled with careful thought, fact-based evidence and strategic implementation. It is also fair to say that the cornucopia of measures being simultaneously delivered by the NT Government as a result of the recommendations from the Riley Review, will not meet this standard.

Both residents and industry alike are perplexed and confused by the rushed implementation of Minimum Unit Pricing (MUP), which commenced on 1 October 2018 with little communication or preparation. Store owners are facing the real possibility of threats to their personal safety with the likely confusion and unhappiness that consumers will experience when insufficiently announced changes impact the price of a variety of products. Further, compliance will remain difficult when the complicated rules related to promotions are poorly understood even by the government itself. It seems a steep learning curve is ahead for all.

However, even more alarming for industry is the overlay of a range of other measures which are being speedily introduced over the top of MUP. It is completely unclear how the effectiveness or impact of MUP can be measured with so many other significant changes at the same time. Some would argue it is in fact impossible to accurately measure or assess. Between a raft of changes to licence conditions for grocery stores, a licence condition review in Alice Springs, and MUP – store owners face the very real threat of simply being unable to keep pace with the compliance environment. And the NT Government faces the challenge of being able to prove whether any of the measures were effective.

Richard O’Sullivan, the former Chairman of the NT Liquor Commission, shares the concerns. Shared here is an extract of his open letter to government and industry:

“I write with regard to takeaway liquor sales, predominantly those sales from licensed outlets, commonly referred to as stores, and the Alcohol Policies and Legislation Review Final Report (‘the Report’).

In essence in the Northern Territory takeaway liquor sales are generated through:

  • Hotel and club bottle shops and hotel drive-through venues
  • Major supermarket chain bottle shops (Coles: Liquorland & Vintage Cellars; Woolworths: BWS)
  • Independent bottle shops (e.g. Headframe bottle shop Tennant Creek)
  • Store and smaller supermarket chains
  • Online purchases from interstate

Currently there are approximately 540 liquor licences operating in the NT. The Report identified that there were 78 store and liquor merchant licences selling takeaway liquor, with a further 182 hotel and clubs providing takeaway sales. While store licences enable six day a week liquor trading, hotel and similar licences provide seven day a week trading entitlement.

The NT Liquor Act has as its predominant objective the minimisation of harm. In order to ascertain the appropriateness of liquor licences, licence conditions and related safeguards, there needs to be consideration and examination of potential harm. The Report does not examine takeaway alcohol volumes or harm levels arising from the various points of sale outlined above. It references store licences in isolation with regard to takeaway liquor, without consideration of sales volumes or harm from the other points of sale.

Trading of licensed stores is specifically targeted with the following recommendation:

‘Takeaway liquor only be permitted to be sold from a standalone business in which the primary focus of the business is the sale of alcohol.’

The Report proffers that takeaway liquor should only be sold from a standalone premises and any business that does not have the sale of alcohol as its primary purpose should not be licensed. Confusingly, the Report then refers to granting a stay for existing licensed  businesses to continue liquor sales and that a period of seven years be granted for a store, or similar, to provide a standalone area for the display and sale of liquor products.

Under this scenario all 78 existing store businesses could continue trading but only after having to bear a cost burden of constructing a standalone area within or adjoining the current business premises. How this lessens or mitigates harm is not explained. A rational mind could conceive this proposal as a cost and red tape impost to store businesses with little or no benefit to alcohol problems besetting the NT. The underlying premise appears to be that a standalone grog shop will cause less harm than an outlet combining alcohol with food.

A lesson from NT Licensing Commission Decisions, in imposing restrictions on takeaway alcohol through limiting hours and product types and volumes, is that alcohol dependent people travel or move to localities where it is more ready availability. This jurisdiction or locality hopping was particularly evident where measures were imposed at communities along the Stuart Highway. Cancellation of store licences would similarly move high dependent drinkers to other easily accessible localities within the townships – moving the problem rather than removing it.

Store licences, like any takeaway licence, can be abused. Historically a number of smaller stores have been breached for illegal and irresponsible trading. So have hotels and major supermarkets.

A floor price for alcohol, a major recommendation of the Report, is being introduced. This initiative is designed to target the sale of cheap high alcohol by volume products and is anticipated to be particularly effective in combatting the harm of cheap ‘bang for your buck’ liquor. Before embarking on any measures, to close or cost impost stores, this initiative should be given time to be implemented and to operate for a reasonable time to enable assessment of its impact on alcohol sales and harm.

The addition of auxiliary police/liquor inspectors and more vigilant enforcement measures, including for secondary supply to persons on the Banned Drinkers Register, should also be factored in before precipitative measures targeting licensed stores are progressed.

I write this as a concerned and long term Darwin citizen with the insight of having been Chairman of the NT Licensing Commission for eight years.”

It seems despite industry’s calls for evidence-based facts to be used to substantiate further changes in NT, the Government is going to press on with its plans without further consultation. LSA NT and ALSA are working with other industry bodies to continue to lobby the NT Government to pause, reflect, and prevent unintended consequences and harm to small business.