News
Wine industry position on liquor reforms
First published in New Zealand Wine Grower magazine, February/March 2010 edition.
In July 2009, the Law Commission published a report entitled "Alcohol in Our Lives: An Issues Paper on the Reform of New Zealand's Liquor Laws" (the Issues Paper). This controversial paper examined New Zealand's drinking culture and the existing liquor laws. The Commission concluded that New Zealand currently has a "heavy drinking culture", which "is a problem not in a moral sense, but rather because of the risks it poses and harm it causes to both the individual drinker and to society as a whole".
The current liquor laws are largely set out in the Sale of Liquor Act 1989. The Law Commission recommends various changes to these laws in the Issues Paper. Importantly, the Commission recommends that the Sale of Liquor Act 1989 should be redrafted entirely, rather than amended. The Law Commission suggests that this new legislation could contain, amongst other measures, laws:
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"allowing the Liquor Licensing Authority to refuse a licence on wider grounds than permitted at present";
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establishing a "split purchase age", which would "[leave] the minimum purchase age at on-licenses at 18, and [increase] the minimum purchase age at off-licenses to 20 years";
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"enacting advertising restrictions in order to treat advertisements for price and discounts on a different basis from other types of advertising"; and
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"making drunkenness in a public place an infringement offence".
The Issues Paper, and the subsequent reaction to the suggestions made by the Law Commission, pose a question to the Wine Industry. Namely, what position should the Wine Industry take on liquor law reforms?
The overarching position should be that the Wine Industry supports the responsible consumption of alcohol. However, the Wine Industry is also clearly reliant on the sale of liquor, and this growing industry is important to New Zealand's economy. The Law Commission acknowledges this, stating that "a 2009 report, commissioned by the New Zealand Winegrowers, estimate the wine industry, with 613 wineries, now contributes $1.5billion to the country's gross domestic product." Additionally, many of the alcohol-related problems listed by the Law Commission do not apply to the Wine Industry. This is largely due to the higher price of wine (than, for example, beer), and the culture surrounding its consumption. Accordingly, it will not be appropriate that the Wine Industry supports all of the measures suggested by the Law Commission.
The Issues Paper divides possible solutions into:
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supply controls;
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demand reduction; and
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problem limitation measures.
"Supply controls" involve measures like restricting the availability of liquor licences. "Demand reduction" largely deals with increased tax on alcohol and restrictions on advertising. These categories both contain suggestions that are potentially harmful to the Wine Industry. However, there are several suggestions contained under the "problem limitation measure" category that the Wine Industry should support. For example, the Law Commission suggests that "more vigorous efforts must be made to enforce the law". They explain that this could include providing "for an increased range of infringement notices for technical and minor breaches of the Act or a licence condition". Clearly the Wine Industry would benefit by ensuring members holding a licence abide by the conditions of that licence. Another measure the Wine Industry should support is the promotion of "policies, facilities and programmes around the country in relation to assessment and treatment for people with alcohol problems".
The Wine Industry should support the suggestions made by the Law Commission in the Issues Paper insofar as they both support the industry and promote responsible drinking. Liquor reform of some kind seems inevitable in the near future. In formulating an opinion now, the Wine Industry will be prepared for any changes that are to come.
Case Summaries - Wine Industry
Re 1-Day Liquor Limited LLA Decision (District Court Judge E W Unwin, Hamilton, 4 December 2009)
This case dealt with an application by 1-Day Liquor Limited for an off-licence. The relevant premises were situated at 152 Collins Road, Hamilton, however liquor was to be sold by internet order only. The Liquor Licensing Authority held that it was acceptable for 1-Day Liquor Limited to sell liquor by internet "on or from the premises described in the licence to any person for consumption off the premises on the basis that delivery will be made from premises other than as described in the licence". 1-Day Liquor fulfilled these conditions; accordingly, an off-licence was granted. Additionally, the Liquor Licensing Authority noted that "an internet off-licence is treated in the same way as any other bottle store", with an obligation to have a manager on duty, and display the relevant signs on the licensed premises.
Accentuate Ltd v Asigra Inc (A Company Incorporated in Canada) [2009] EWHC 2655
This Canadian case dealt with an agreement for the distribution of goods. It could have application to the distribution of wine. The agreement contained a clause that specified the governing law, and the place of (potential) arbitration. The issue was whether the arbitration clause covered a claim for compensation under a specified Canadian Regulation. The Court held that neither the choice of law nor the arbitration clause could prevent the Regulations from applying. The reason was that "the provisions in the Regulations (as derived from the EU Directive) which entitle a commercial agent to claim compensation are mandatory, and the court was required to give effect to them notwithstanding any expression to the contrary by the contracting party".
The consequence for NZ wine producers with distribution agreements specifying jurisdiction and the place of arbitration is that these provisions will always be subject to the laws of the jurisdiction where the arbitration takes place.
