Tauranga City councillor Steve Morris says the council has essentially "rolled over to the liquor barons" by removing a cap on the number of new liquor outlets in the city.
But mayor Stuart Crosby says the new policy is balanced and does not penalise responsible drinkers.
A shared alcohol policy between Tauranga City Council and the Western Bay District Council was first adopted in November 2013, which capped the number of off-licenses in the region and limited where new stores could be opened.
The policy was appealed by supermarket chains Progressive Enterprises and Foodstuffs North Island Limited as well as Liquor Land and Super Liquor Holdings.
The cap was removed from the policy in September 2014 by mutual agreement from both councils, avoiding a court hearing.
Councillor Steve Morris said the previous council received more than 1000 submissions to its draft alcohol policy, the majority in favour of introducing a cap.
Mr Morris said the submissions were essentially ignored because of a fear of litigation.
"We had the mandate from the community.
"The case was strong and we essentially rolled over to these liquor outlets and were fearful of litigation.
"Appeals have been heard up and down the country and councils that have had a cap have been allowed to retain that cap.
"Time has proven that those who stood up to these guys were actually in the right and, yep, we didn't and we have quite a weak policy now which in my view is a bad policy as a result."
Mr Morris said when there was a higher density of liquor outlets, there was a lot of price competition. Evidence suggested this led to increased harm within the vicinity of the outlets.
Mr Morris said no city councillors would say having more liquor outlets in Merivale competing on price was a good idea, which the new policy allowed.
Every time an application was made to open a new off-license Mr Morris said he would be objecting.
"I think the community deserves nothing less."
Mr Crosby said he realised Mr Morris was passionate about the issue but at the end of the day, the policy was a balanced one jointly decided by the Western Bay District Council and Tauranga City Council.
"I disagree we rolled over to the barons ... We took a pragmatic approach ... about minimisation and not prohibition."
Mr Crosby said the minor change to the policy allowed a new off-license to be in new urban growth areas such as Papamoa East, Upper Pyes Pa and ultimately Tauriko.
"People shouldn't have to travel distances to procure alcohol.
"The key balance we need to make is that the vast majority of responsible people are not disadvantaged because of a minority."
Two applications for new outlets in Bethlehem and Mount Maunganui had already been declined under the new policy, he said.
Discretionary conditions that would have allowed the stopping of the sale of individual RTDs and stubbies and limiting store front advertising to 50 per cent of total shop front area were also removed from the policy.
At a Tauranga City Council meeting on Wednesday, a start date of November 16 was decided upon for the new policy.
Yesterday, the Bay of Plenty Times reported a fight was developing over plans for an off-licence liquor store in central Tauranga.
Members of the community said the number of alcohol outlets in the area had reached saturation point.
HB Enterprises had applied to open an off-licence alcohol store in 11th Ave.
Within a 1km radius people can get alcohol from at least 10 premises, including restaurants.
Clauses removed from Tauranga and Western Bay alcohol policy:
•Capping the number of new off-licenses allowed to open.
•Taking into account the proximity of other off-license and educational facilities.
•Discretionary conditions to consider: no breaking down of pre-packed alcoholic products (eg RTDs, stubbies) for single sales; and limiting advertising to less than 50 per cent of the total shop-front area.