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Sunday Trading And Supermarket Sales

2 & 3 - Sunday trading and supermarket sales

2 & 3.1 Background

Only in vineyards is Sunday trading permitted for off-licences. In the case of on-licences and clubs, the position is quite the reverse. Sunday trading is widely permitted, although the circumstances vary considerably according to the type of premises concerned.

Supermarkets, being licensed under an off-licence, are not permitted to sell liquor on Sundays and, alone amongst such licensees, their product range is largely restricted to wine.

In this chapter we shall first consider the question of Sunday trading in terms of hotels and taverns, then in terms of off-licences. Finally, we shall turn to the issue of the limits upon the kinds of alcohol that may be sold in supermarkets which have an off-licence. Because of their associated relationship, we have found it convenient to run together in one chapter items 2 and 3 of our terms of reference.

2 & 3.2 Hotels and Taverns

Many submitters asked that Sunday trading not be permitted. However, these submissions did not appear to take into account the wide range of circumstances in which Sunday sales for on-premises consumption are presently allowed.

Consumption of liquor on a Sunday is permitted for premises holding on-licences in clubs, restaurants, night-clubs, theatres, cinemas, airports, ships, planes and vineyards, without restriction. Hotel guests and their guests may also purchase liquor without restriction. Members of the general public can, however, consume liquor on a Sunday in a hotel or tavern only if they are present "for the purpose of dining".

The dining exception is one which has given rise to considerable difficulties for enforcement authorities, licensees, the public generally, and the Courts. As ALAC put it in its submission to us, "the circumstances under which alcohol may be consumed on a Sunday are neither clear nor easily enforced".

The dining exception does not require that the drinker be actually dining at the moment of purchase, and thus it is quite lawful for alcohol to be supplied so long as the customer is present for the purpose of dining. This implied requirement for the licensee to judge the customers' interest in being on the premises raises obvious difficulties.

The LLA has described as "almost impossible" the task "of describing a practical test for determining whether patrons are present on licensed premises for the purpose of dining".

The "dining exception" is also subject to difficulties in interpretation as to what may be said to constitute "dining" as distinct from consuming lighter fare. Different Courts have at various times held a pie to be a substantial meal, consuming a pie and chips has been similarly accepted, but on other occasions quite contradictory rulings have been given.

ALAC advised us against recommending a tightening of the legal definition of the meal requirement. That could lead, as ALAC put it, to enforcement staff spending "more time checking kitchen facilities and menus than addressing sales to minors or intoxicated patrons".

It is no wonder to us either that the Police were amongst those who recommended that hotels and taverns be permitted to serve the general public on a Sunday. Their task of enforcing the law in this area must be nigh impossible and would surely lead them into considerable conflict with honest members of the public where they attempt to enforce it on a widespread basis. It is noteworthy too that sports clubs, which are almost universally permitted to open on a Sunday, are not limited to selling only to those present for the purpose of dining. Nor of course are cinemas, airports, theatres or night-clubs so limited. A further example of an inconsistency flowing from the "purpose of dining" requirement is the fact that night-clubs can sell liquor freely on a Sunday night, but that entertainment bars of hotels and taverns may not. The service that each offer to the public is often identical, but the law prohibits the tavern from offering that service on a Sunday.

It has also become increasingly difficult, the LLA informs us, to distinguish between taverns and many restaurants and cafes. It has described the distinctions as being, in some cases, "patently artificial and border[ing] on the absurd". It has reminded us that if laws are not enforced, "then legislation can only be brought into disrespect".

We share those views and also echo the LLA's comment that:

There is frequent reference in today's competitive environment to the need for a level playing field; and in this respect it seems that the traditional operators in the liquor industry are very much playing from the down hill end of the field. The situation could also be said to disadvantage members of the general public who, if not members of a club, must pay the premium generally required to gain access to premises able to cater for the casual drinker on a Sunday.

The Ministry of Health in their submission was also amongst those who recommended that Sunday trading be permitted in hotels and taverns. In the Ministry's view issues concerning who can and cannot trade on a Sunday:

deflect enforcement activities from the prevention of alcohol abuse and the sale of liquor to intoxicated patrons and minors.

The Ministry of Transport submission to us on this issue said:

In terms of risks to road safety, the present provisions cloud the issue of host responsibility and may cause patrons to over estimate the extent to which food mitigates the effects of alcohol consumption. A drinking driver is a safety risk, regardless of whether they are dining.

We therefore consider the "dining" restriction on Sunday trading should be removed.

Clarification and simplification of the Sunday trading laws will also improve the effectiveness of host-responsibility measures and make it simpler to enforce the legal minimum drinking age.

To many in our society, Sunday is still a day of sacred religious significance. Many people made submissions to us recommending against any extension of liquor sales rights on what is to them a day of special significance. Society as a whole, however, has not for many years required Sunday to be especially recognised by the imposition of restrictions on trading or the provision of entertainment. Such controls exist in relation to a few days per year: Christmas Day, Anzac Day and Easter. Parliament has, however, seen fit to remove them from other aspects of social and commercial life. To that extent then, the Act's restrictions on Sunday trading and Sunday entertainment can be seen as anomalous. They reflect a by-gone age when Sunday received wide recognition and protection as a day of rest.

We therefore consider that it is no longer possible to justify restrictions on Sunday trading by reference to religious criteria that have been discarded as a basis for regulation of our social and economic lives. Such justification may also be improperly discriminating, as there are those who regard Saturday as a day of religious significance.

There are those, too, who will contend that, by allowing Sunday sales, particularly in the case of hotels and taverns, social ills flowing from alcohol abuse on other days will flow onto Sundays as well. Such concerns essentially rest on an acceptance of the largely discredited availability theory. That would seem to equally well justify restricting alcohol sales to perhaps three or four days a week. Indeed, if this was the case there would be a good deal of merit in the proposition that liquor sales on Fridays and Saturdays should be the subject of similar controls to those that now apply on a Sunday, and that Sundays be "opened up". One moderation advocate suggested ironically that Sunday trading should be allowed, but that Saturday be made a "dry day", because after all that is when most of the troubles occur.

To summarise the position concerning Sunday trading in hotels and taverns:

We find the present law to be lacking in consistency and almost impossible to enforce;

We have received submissions from ALAC, the Police, the Ministry of Health and the Ministry of Transport all unanimously in support of Sunday trading;

We feel it no longer appropriate to restrict Sunday trading on religious grounds.

Accordingly, we recommend that hotels and taverns be permitted to sell liquor to the general public on a Sunday and that section 14(2) of the Act be repealed.

It would also seem to us that section 14(4) of the Act is in need of amendment. This section gives the LLA the authority to designate hotel and tavern bars as "restricted" or "supervised" areas. That power should in our view be available in all cases, not just hotels and taverns. Indeed, the LLA has customarily designated night-club bars as "restricted" areas.

We would therefore also propose that section 14(4) of the Act be repealed and replaced with:

On granting any application for an on-licence, the Authority may designate the whole or any part of the premises or conveyance as a restricted or supervised area.

That would seem to remove the final reference in the Act to hotels and taverns, and we therefore propose that section 2 of the Act be amended so as to delete the definitions of those now outmoded expressions.

2 & 3.3 Off-Licences

The position concerning Sunday sales for consumption off the premises is less complex than that relating to on premises sales. The only exception to the general prohibition appears to be that vineyards may sell their own produced wine on a Sunday, although on other days they may sell the full range of alcohol products.

Thus, while it is quite permissible to drink at a club, with a meal at a tavern or a hotel, or at a function under a special licence, it is unlawful to restock one's own supplies on this second day of the weekend, with the sole exception of wine purchased from a vineyard.

That is not to say however, that we find the law particularly consistent even in this area. We consider it remarkable, for example, that the law prohibits the public from making Sunday purchases of liquor to take home, but permits them to buy liquor for consumption on a wide range of premises. In terms of drink/drive concerns, we would have seen more justification for the position being reversed.

Submissions received by us on the Sunday opening of off-licences mirrored very closely those on the related issue of Sunday trading of hotels and taverns. Once again, many of those that support the availability theory and others of a religious persuasion, argued against any change to the law. Once again also, ALAC, the Police, the Ministry of Health and the Ministry of Transport either recommended in favour of Sunday opening or did not oppose it.

We do not propose to traverse again our response to the religious argument, suffice to say that we do not regard it as providing a valid basis for the formulation of public policy.

Nor are we convinced by arguments that increased purchase opportunities would lead to increased alcohol abuse. Both ALAC and the Ministry of Health were extremely cautious as to the weight which should be attached in the contemporary New Zealand context to overseas research which might be interpreted as suggesting an increase in vehicle accidents or other visible manifestations of alcohol abuse.

We think it important, as was acknowledged by the Ministry of Health, that for "legislation to be effective it must have credibility with the public". It was in that context that the Ministry of Health cited "65 to 68 percent of the New Zealand public support Sunday trading".

We certainly concur with the need for laws to have the support of the public. As we argued in relation to the drinking age issue, if a law is to restrict the freedom of the individual it must have a high degree of public acceptance, particularly among those most affected by the restriction.

We consider that the present ban on Sunday trading in off-licences fails that test. It is not therefore, in terms of the object of the Act, "a reasonable system of control".

Accordingly, we recommend that all off-licence premises be permitted to trade on Sundays, and that section 37(1) of the Act be amended so as to delete the words "on any Sunday or".

2 & 3.4 Supermarket Sales

We refer in this section to "supermarket sales", which also encompasses grocery stores and the like, which hold a licence in terms of section 36(1)(d) of the Act.

Unlike other holders of off-licences, these stores are restricted in the range of alcoholic products that they may sell to those listed in section 37(3)(a) and (b) of the Act. In essence, they are restricted to the sale of table wines, and they may not sell beer, spirits, liqueurs or fortified wines.

Prior to the passage of the 1989 Act, with just a few exceptions, supermarkets were not permitted to hold a liquor licence. Those arguing for the right of supermarkets to sell wine often did so on the basis that, as an adjunct to food, it was natural that it should be available in food stores. After much debate and resubmitting of resolutions, Parliament was persuaded to approve the present law, very largely, we understand, on that basis.

That argument seems to us to smack of the 1962 Act's "need" approach to liquor licensing, whereby no new licence could be approved unless a "need" was first shown in the area. Thus, it was argued that there was a consumer demand or "need" for supermarkets to offer this service, and accordingly it should be permitted.

We prefer to approach the issue from a different standpoint, namely that which underlies the philosophy of the 1989 Act, "the establishment of a reasonable system of control" in order to help in the reduction of liquor abuse.

From that standpoint, it is difficult to justify why one group of retailers should be permitted to sell the full range of liquor, but others be prohibited from doing so, merely on the basis that some are principally in the liquor business, whereas to others it is additional or supplementary to their major business. (It is perhaps appropriate to note in this regard that the quantity of liquor sold is not relevant; some of the large supermarkets' wine turnover would greatly exceed the total sales of many small liquor stores.)

Only one argument relevant to the issue of liquor abuse was raised with us, and that focused on the concerns as to the age of supermarket checkout operators. It is common for such employees to be under 18 years, and many submitters took the view that younger people may be more easily pressured into selling to minors, especially if supermarkets were able to sell beer.

A number of the trade submitters, including even HANZ, acknowledged that they saw no difficulty in supermarkets' sales rights being extended across the product range provided that they became subject to the same restrictions as other off-licensees. These submitters were referring to the practice of underage checkout operators selling liquor.

It came as a surprise to most of these submitters to find that supermarkets are subject to the same restrictions as other licensees in this regard. As is pointed out in the New Zealand Police submission, section 161 of the Act, dealing with the employment of minors on licensed premises, was amended in 1989, even before the Act came into force, so as to delete subsection (1) which had rendered it an offence to employ a person under the age of 20 years in the service or sale of alcohol.

Accordingly, the only restrictions on minors selling liquor since then have been those sections of the Act dealing with the presence of minors in designated areas. Many hotel and tavern bottleshops are designated, but most former wholesale premises and wine shops, and all new retail off-licences are entirely undesignated.

Therefore most licensees have been able to employ minors to sell liquor since 1990. The fact that few have done so is more likely due to a misunderstanding as to the state of the law than any concerns as to the employment of younger staff.

Finding no basis upon which one could justify restricting the sale of liquor to wine only in some licensed premises but not others, we have not seen the question as being whether supermarkets should be able to sell a wider product range, but rather as to whether they should be subject to additional controls in the event of their wishing to do so. A number of submitters have proposed controls relating to the age of sales staff, or the setting aside of dedicated areas within the store for the display and sale of liquor, or the sale of liquor only through dedicated checkout lanes.

(a) Age of Staff

As we have already indicated, supermarkets are currently subject to the same laws as other premises in this regard. There would therefore appear to be no reason to single out supermarkets as the subject of the special legislative provision. If such a rule were to be introduced, there would be no justification for it to be limited to supermarkets only. Instead, it would surely have to be of equal application to all licensees. Thus, for example, it would have to apply to restaurants as well. This would have serious impact both in employment opportunities and restaurants' costs, particularly if the drinking age were to be set at 20 years.

(b) Dedicated Lanes

Presumably, this suggestion is made in response to the concerns about the age of sales staff. Restricting sales to those checkout lanes where an adult worker is on duty would meet the objective without the need to permanently dedicate particular lanes.

(c) Dedicated Area

Again this suggestion is a response to concerns over the age of sales staff. Setting aside a special area for liquor has a number of drawbacks in our view. First, it would be an utter nonsense in small country stores where there is only one till in any event. Secondly, requiring separate checkout facilities and staff would increase costs. Thirdly, it would inevitably act as an intervention in the labour market with the consequence of reducing employment for young people, increasing supermarkets' labour costs and, in due course, prices. Fourthly, it would reduce the flexibility currently enjoyed by supermarket operators as to where liquor is displayed in stores. (Thus, for example, it would prevent special promotions such as red wine by the butchery or delicatessen section.) Fifthly, the Act already empowers the LLA to designate areas as supervised or restricted, thereby enabling it to require liquor to be sold only in dedicated areas. To date it has not found the need to impose such a condition on a supermarket. Sixthly, presumably the purpose of restricting sales to a particular area is to make access to liquor more difficult. (If its purpose is merely to ensure that sales staff are of age, then that is more readily met at the actual point of sale.) In fact, minors are presently perfectly entitled to enter most off-licences, and it would seem unreasonable to impose this restriction on supermarkets but not on other licence holders.

Rather than adopting any of the proposed "solutions" to concerns arising from the age of sales staff, it is our view that responsibility for ensuring that liquor is not sold to minors rests firmly with the licensee or, under our proposal the licence controller. They appoint the staff, undertake necessary training, supervise their performance and in the final analysis, are personally responsible for compliance with the law's requirements.

Substantial fines can be imposed on errant licensees, but more substantial is the threat of loss of the licence. Given the high turnovers from wine sales presently enjoyed by supermarkets, we strongly doubt that licensees would put at risk the substantial profits that trading within the law will bring in order to sell an occasional bottle of beer to a minor. Such market place incentives will, in our view, serve to minimise the potential for abuse, thereby making it premature to change the law so as to prohibit underage staff serving customers.

Rather, we propose the law be left unchanged for the present. It will remain open to the LLA to impose such conditions as it considers appropriate on a case by case basis, not forgetting of course that every application is first reported on by the local authority in its capacity as DLA. If, on occasion, the LLA regards particular premises, or individual applicants, as requiring special attention, then section 37(4)(c) of the Act is already in place and empowers the LLA to impose conditions relating to the "steps to be taken by the licensee to ensure that the provisions of [the Act] relating to the sale of liquor to prohibited persons are observed".

Should our confidence be misplaced, then the position could perhaps be reviewed by the LLA making it a general practice to impose additional conditions on particular types of off-licences (for example supermarkets), or early changes in the law, but certainly we see no need to depart from the status quo at the present time.

In this regard it is noteworthy that, in its decision on the first supermarket off-licence case, the LLA was invited to impose conditions restricting the display of wine to a particular part of the store, limiting access to that area to adults, and requiring sales staff to be of age. The LLA acceded to none of these requests, and in the seven years since has never yet had cause to depart from that practice.

Before concluding this section of our report, could we express our pleasure in noting that the reforms of the last seven years have at least changed one's attitude. At the time of the Laking Review, it was frequently said that allowing wine sales in supermarkets would result in housewives spending the family food budget on wine, leaving the children without sufficient to eat. The Laking Report quickly dismissed this proposition as being a "sexist argument". We note with pleasure that 11 years later when the issue of removing the restriction to wine only is bought up for reconsideration, that not one submitter even raised this "sexist argument" with us. It may be remarked that once again practical experience with the reforms has shown many of the previously expressed fears to have been groundless.

After much deliberation, therefore, we have concluded that no present justification exists for treating supermarkets any differently from other off-licensed premises, and that the Act already confers wide discretionary powers on the LLA to impose additional conditions, should it consider it appropriate to do so.

2 & 3.5 Summary

In summary, the Advisory Committee makes the following recommendations in terms of Sunday trading and supermarket sales as it affects hotels and taverns, off-licences and supermarket sales:

a) That hotels and taverns be permitted to sell liquor to the general public on a Sunday, and that section 14(2) of the Act be amended by repealing the words "on any Sunday or".

b) That section 14(4) of the Act be repealed and replaced with:

On granting any application for an on-licence the Authority may designate the whole or any part of the premises or conveyance as a restricted or supervised area.

c) That all off-licence premises be permitted to trade on Sundays, and that section 37(1) of the Act be amended so as to delete the words "on any Sunday or", and that a consequential amendment also be made to section 1A to delete (b).

d) That present restrictions which confine supermarkets to selling wine only be removed, and that section 37(3) of the Act be repealed. Section 36 of the Act is the subject of a recommendation to repeal in chapter 11.