Barker Rick: Sale of Liquor Amendment Bill (No 2) — Second Reading Instruction to Committee In Committee Third Reading 
Barker Rick: Sale of Liquor Amendment Bill (No 2) — Second Reading Instruction to Committee In Committee Third Reading 
[Volume:616;Page:12338] 
Hon RICK BARKER (Associate Minister of Justice) 
: 
 I move  
That the Sale of Liquor Amendment Bill (No 2) be now read a second time 
. The bill has been reported back from the Commerce Committee. I would like to thank the members of the select committee for the work they have done on this bill. In most respects the bill is identical to the Sale of Liquor Amendment Bill (No 3) that was introduced in 1999. While the original bill proposed a complete deregulation of licensing trusts removing all monopoly trading rights this bill takes a different approach. It allows but does not require licensing trusts to reconstitute as community trusts. The Government’s approach recognises that some communities may want to retain their existing licensing trust arrangements until a majority of the trust’s electors vote in favour of competition. 
The main purpose of this bill is to provide licensing trusts with the option of reconstituting as community trusts. It gives community trusts freedom to operate in industries other than the hospitality industry while ensuring that their activities remain accountable and transparent. Community trusts have a broader community focus and unlike licensing trusts their activities need not require them to be engaged in the sale of liquor. The members and electors of each licensing trust will determine whether the trust becomes a community trust. The process can be initiated by a resolution of the trust’s existing members. Electors will also have the option of calling for a poll on the issue as well. The residents of the former licensing trust district will elect the members of the community trust. Elections will be held at the same time as the triennial general elections for other local authorities. 
The bill also contains provisions that are designed to improve the financial performance and accountability of all licensing trusts. Those provisions will apply irrespective of whether or not a trust restructures itself as a community trust. Local licensing trusts will be able to carry out business outside their area without the need to first hold an expansion poll. All licensing trusts will be required to disclose in their annual accounts the remuneration paid to employees and senior managers. Licensing trusts will be required to hold annual meetings to account to electors for the effectiveness of their performance. 
There have been some amendments to the bill through the select committee process. After considering submissions on the frequency of elector polls the committee has recommended that it would be fairer for the polls to be held less frequently. The committee has changed the bill to ensure that an elector-requisitioned poll cannot be held within 3 years of an earlier poll. That is consistent with the regime in the Act that governs competition polls. The change does not in any way limit the ability of licensing trusts members to initiate a reconstitution of the board by resolution on an annual basis. Electors will continue to have the right to call for a poll whenever the members pass a resolution in favour of reconstitution. 
The committee also recommended the addition of a provision to clarify that a licensing trust would lose its exclusive trading rights upon its reconstitution as a community trust. It would be unfair for a community trust to hold a monopoly right within its district while being able to trade freely outside that district. The committee has therefore amended the bill to clarify that monopoly rights do not transfer to the new community trust. In response to a submission from the Auditor-General the committee has also amended the financial reporting provisions for licensing and community trusts. That change will improve the accountability of licensing and community trusts by requiring their financial statements to comply with generally accepted accounting practice. 
Part 2 makes a number of changes to the principal Act that are not related to licensing or community trusts. The bill incorporates amendments to the conditions applying to off-licences so that wineries can sell their own wine on Easter Sunday if they either grow the fruit or grapes on site or make the wine on site. The intent of this aspect of the bill is to reintroduce an earlier provision of the principal Act that allowed wineries to sell some of their own wines on any Sunday including Easter Sunday. Wineries will have to hold an appropriate off-licence to take advantage of that provision. 
Submissions to the select committee proposed that the bill be changed to allow wineries to sell the full range of wine produced under their labels regardless of where it is made or grown. However the committee considered that if that were permitted wineries would have a new broader right than they had previously enjoyed. The purpose of the provision is to aid local tourism and the committee considered that an extension of the nature proposed in submissions may erode the restrictions Parliament approved when it considered off-licence sales in 1999. The committee has therefore made no change to that aspect of the bill. 
The bill contains an important amendment to the principal Act to provide a legislative basis for controlled purchase operations. The amendment will ensure that the police can continue with those effective enforcement operations. The police district licensing inspectors and public health officials currently join forces to conduct enforcement operations to test whether bottle stores and other liquor outlets are complying with the Act. Those operations catch liquor outlets that break the law by selling alcohol to young people under the age of 18. Under-age volunteers go into licensed premises at the request of the police and attempt to purchase alcohol. Under-age volunteers are fully briefed by the police beforehand and only take part in the operations with the agreement of their parents or guardians. 
Controlled purchase operations have been conducted fairly widely throughout the country for the last 3 years. They are a highly effective method of assessing compliance with the Act. The police also obtain evidence from them for prosecutions and other enforcement actions. However a recent District Court decision has raised a concern that the young people who assist the police with these enforcement operations may be inadvertently breaking the law by purchasing alcohol. To address that concern the bill amends the Act to specifically provide that under-age volunteers who purchase alcohol at the request of a police officer during an enforcement operation do not commit an offence under the Act. 
The bill also contains an important technical amendment to provide for the staggered introduction of the requirement for a general manager of licensed premises to hold a prescribed qualification. The amendment is needed in order to provide for a transitional period during which general managers can obtain the qualifications they will need to comply with the general manager requirements introduced by the Sale of Liquor Amendment Act 1999. Submissions to the select committee generally indicated strong industry support for managers to be qualified. Concern was expressed in a few submissions over the content of the prescribed qualification and the possible consequences of the changes for existing trainers and their training programmes. The qualification itself is to be prescribed in regulation and is not a matter that is dealt with in this bill. 
The Hospitality Standards Institute which is the industry training organisation for the hospitality industry developed the Liquor Controller Qualification in 2000. I understand that the Hospitality Standards Institute consulted widely when it formulated the units that currently make up the Liquor Controller Qualification. The qualification is registered with the New Zealand Qualifications Authority and is now widely recognised across the industry. However the Hospitality Standards Institute in its submission to the committee proposes a review of the prescribed qualification to ensure that it is still fit for its purpose. In view of the time-lapse since the development of the qualification further consultation concerning its content should take place in the course of developing the regulations prescribing the qualification. Consultation over the content of the regulations will allow the concerns raised with the select committee over aspects of the content of the qualification the status of existing trainers and their training programmes to be considered. 
Finally I understand that the committee also received a number of submissions on the restrictions that prevent supermarkets and grocery stores from selling Asian cooking wine and other food condiments containing alcohol. Asian cooking wines are prepared for culinary purposes and have been rendered unsuitable for drinking normally by the addition of salt. At present there is uncertainty as to whether supermarkets and grocery stores may sell Asian cooking wines and other food condiments containing alcohol. Although the committee was not in a position to address that issue I signal my intention to put forward a Supplementary Order Paper during the Committee of the whole House that will allow supermarkets and grocery stores to sell those products under an off-licence. 
I commend this bill to the House.