Problems were escalating because of the availability of cheap alcohol at supermarkets, which drove people back to the suburbs to drink, he said.
"Whereas you're paying $8 or $9 for a drink [in a licensed premises] these same guys are getting a drink for a little over $1.
"Long-term this is just going to weaken the opportunity we have of quelling the problem drinking with youth."
He hoped the recently-passed Alcohol Reform Bill would slow the proliferation of on and off-licences and get rid of bad operators.
Last November, Way Home Liquor's off-licence was suspended for 24 hours and Angrej Singh's general manager's certificate suspended for four weeks after alcohol was sold to a person under 18 years of age in a controlled purchase operation.
In June, Donna Maree Flavell was denied a general manager's certificate renewal after admitting arriving to work as a temporary duty manager at the Rotorua Returned Services Association under the influence of alcohol and continuing to drink alcohol behind the bar.
Nationally last year, more than 740 enforcement applications were considered by the LLA. About 630 cases resulted in suspensions and 42 in cancellations.
The Ministry of Justice says the most common breaches are selling alcohol to minors, having intoxicated patrons in bars and breaching licence conditions.
Ministry acting general manager of special jurisdictions Marguerite Delbet said the Sale and Supply of Alcohol Act - set to be enacted later this year - included measures to address problem areas and a scheme to deal with persistent non-compliance.
"Licencees or managers who commit offences three times within three years can lose their licence or certificate."
Critics of the new legislation say the Government missed an opportunity to change the nation's harmful drinking culture.
Hospitality NZ chief executive Bruce Robertson said the hospitality industry was being unfairly targeted for New Zealand's drinking problem.
Enforcement decisions currently being made by the LLA would now be made by local licensing committees with the power to impose conditions and restrictions on operators, adding compliance costs without reducing alcohol harm.
On-licence premises now sold less than 25 per cent of all alcohol, he said.
"Simply applying more conditions to an industry that's actually operating pretty well now is not going to influence the behaviour of New Zealanders who drink, when most of the irresponsible alcohol consumption is away from licensed premises.
"If you want to change people's behaviour, then you need to send a signal that it's not OK to get drunk."
Hospitality NZ wanted it made an offence to be drunk in a public place, which would put more responsibility back on Kiwi drinkers.
Currently, the only people held responsible for drunkenness were licencees who sold alcohol to intoxicated patrons or allowed them at bars, Mr Robertson said.