Explainer: What's going on with alcohol sales in West Auckland

Tuesday, 19 June 2018

Visitors to West Auckland are often bamboozled to find they can't buy wine at the supermarket.

The reason for this is the local alcohol licensing trusts, and their existence is something that people often feel passionately about - either for or against.

How it works is complicated and often confusing. This article hopes to help put some understanding into the conversation.

What is a licensing trust and why is there one in West Auckland? 

It's a community social enterprise. The people of West Auckland voted with a 95 per cent majority in 1971 to form a monopoly on bottle shops and pubs/taverns. The goal was to reduce alcohol-related harm, and harness its profits. There used to be lots of licensing trusts across the country but many have been voted out or folded over time. Don't be fooled by the term'licensing trust', as they do not issue liquor licences.

**READ MORE:

* Group close to forcing referendum

* Petition to be launched against The Trusts in West Auckland

* Waitakere licensing trusts under scrutiny

* Licensing trusts: Glass half full or empty?

* Paying a living wage 'adds up pretty quickly' – says alcohol trusts**

Can new liquor stores or bars open there?

No they can't, from the east of Kumeū to Avondale and Blockhouse Bay only The Trusts are allowed to apply to the council for a licence to run a bottle shop or a bar.  

But I've seen other bottle shops around the area?

It's confusing as there are a few historical exceptions of businesses who have renewed licences from before 1972 - for example two Wine Villas, and the shop next to Countdown in Lynnmall. Point of sale shops are also allowed, such as Soljans Estate Winery in Kumeū. 

What about restaurants and nightclubs?

Anyone can apply to the council for such a licence, as long as their primary purpose is selling food or entertainment and not drinking. It's a misnomer that people need to buy food to drink at a place with a restaurant licence, such as Good Brothers at Lynnmall.

Why can't I buy alcohol in the supermarket like elsewhere in Auckland?

Visitors to the west are often taken by surprise by this. But, apart from some exceptions, off-licence alcohol can only be sold by The Trusts, who own West Liquor as well as Village Wine and Spirits bottle shops. People can order alcohol online from a supermarket - but it comes from a shop out of the area and cannot be picked up in West Auckland.

So how do The Trusts work?

Seventeen elected members sit on the Portage and Waitākere licensing trusts and are voted in by the public every three years. They help set the direction for The Trusts business, jointly owned by the licensing trusts. Each member is paid $280 per meeting and two of them are presidents earning $30,000 per year. They decide how the profits from The Trusts are generated and where the money should go.

And how much do they give back to the community?

The Trusts says it has budgeted to give back more than $2 million for the 2018/19 financial year, and it plans to grow this to $5 million annually within the next five years. It doesn't give back all it could as it has been building an investment nest egg - planned to be $100 million by 2019. It says it is not required by law to give back, and the nest egg is to allow it to keep doing so when bad economic times hit. Opponents say this is empire building and the money should be given to the community as it is made.

The Trusts has gambling machines at its bars - where does all that profit go?

It goes to The Trusts Community Foundation (TTCF), which distributes it along with the pokie money from other licensing trusts around the country. TTCF is not The Trusts, but The Trusts' elected members make recommendations to it on how the pokie money should be distributed in West Auckland - millions of dollars each year. Knowing whether charitable money has come from The Trusts or from TTCF has in the past been mixed up.

I heard it is all the same people?

Some of them are. Ross Clow and Warren Flaunty are elected members and also directors on The Trusts Community Foundation. West Auckland councillors Ross Clow, Linda Cooper and Penny Hulse are all licensing trust elected members, as are many local board members.

What is needed to spark a referendum on the licensing trusts?

If more than 15 per cent of people on the electoral roll in a trust's area sign a petition then a vote would be forced. 

What would happen if they got voted out?

If more than 50 per cent of people voted against a licensing trust, competition would be allowed to set up bottle shops and bars. Supermarkets would be able to sell alcohol. The Trusts would continue along with its elected members - but its profits from alcohol sales could take a hit.

What happened last time the public had a vote on the West Auckland licensing trusts?

Foodstuffs and Progressive Enterprises gathered enough signatures in 2002 to force a referendum. But they lost the vote in 2003, when 57.8 per cent of voters supported the Waitākere trust and 58.3 per cent supported the Portage trust. Community organisations like schools and lifeguards lobbied for the trusts, and Progressive Enterprises said The Trusts had bought votes. The supermarkets vowed to try again three years later, but did not. The trusts were required by law to pay for the referendum, but they did not initially want to pay the $15,000 for scrutineers to check the supermarkets' 24,000 signatures. The supermarkets were reported as spending $3 million on advertising. The trusts spent $1.3 million defending the poll.

Does having The Trusts really stop bottle shops popping up on every corner?

Competition cannot move in while a licensing trust is in place. Apart from this, the council is working to implement a local alcohol policy, but it is being challenged in the courts by Foodstuffs and Progressive Enterprises. The local alcohol policy would place restrictions on where bottle shops can be and when they could open across the city.

Is it more expensive to buy alcohol from The Trusts bottle shops?

The Trusts says Nielson data shows its wine prices are on par with other retail stores. A Stuff analysis in 2018 of alcohol prices at West Liquor (The Trusts' stores), Liquorland and Countdown found beer and wine was cheaper outside of West Auckland. The Trusts' bottle stores also do not have as many low-cost choices as supermarkets do.