Unrest in the West: Battle lines drawn in liquor sales war

A new battle is brewing over access to alcohol in West Auckland. Chris Reed reports.

Boxes of signatures are stacked on the shelves in the small office at Nick Smale's Te Atatu Peninsula home.

The reluctant figurehead of a community group pushing for more competition in West Auckland's alcohol market knows the room needs to get more crowded yet.

About 12,500 people have signed the group's petition calling for a referendum on the current set-up, which is dominated by the Portage and Waitakere Licensing Trusts.

Smale's group - the West Auckland Licensing Trust Action Group (Waltag) — needs about 28,000 signatures (15 per cent of almost 190,000 registered electors) to force what would be the first vote on a competition proposal for 16 years.

Waltag wants it to coincide with local body elections in October, to reduce the cost to ratepayers and yield a higher turnout.

But last call is looming. Electoral officials have given them till June 14 to get the signatures. Summer and a shortage of people mean momentum has slowed.

Waltag, says Smale ("very much spokesman rather than leader") is building for a "final push". "We've slowed down, hopefully it will be a sprint to the finish line."

Eight hundred metres away, side by side, are the latest additions to the trusts' portfolio.

Opened in January, Mr Illingsworth offers food and drink in an environment as suited to Sunday lunch with the olds as Saturday night beers with the boys.

Next door is the newest of the trusts' 26 bottle shops, a large, light branch of West Liquor with a big chiller, bigger range and fancy bar for tastings. It's less than a fortnight old.

The former has a tavern licence, the latter an off-licence. The trusts have a monopoly on applications for both.

Anyone can apply for a restaurant licence, but food must be the primary offering at all times.

So the trusts control bottle shops, meaning no alcohol sales in supermarkets; and taverns, so no other venues where drink is the main attraction.

West Auckland licensing trusts chief executive Simon Wickham says the group pushing for a public vote on competition is "a voice" to be heard, but not "the voice". Photo / Supplied

The monopoly on tavern licences, says Smale, means West Auckland has fewer decent drinking options than other parts of the city.

Auckland Council data provided to Waltag last June shows 10 taverns in the trusts area, four for every 100,000 people. That compared to 560 in the whole council area, 39 for every 100,000, itself slightly lower than the national average.

"I don't think arguments that the West Auckland monopoly doesn't distort the market or stifle hospitality are borne out by the statistics," says Smale.

Whether it's a cap on pubs or supermarket shoppers driving to Albany or Kumeu to buy alcohol and food at the same time, Smale argues there's a negative impact on West Auckland's economy.

But the hospitality landscape is shifting: More people want to drink while they eat, hence the growth in restaurant licences issued to other operators.

Yes, says Smale, but there is still demand for venues that operate as a tavern licence allows. Essentially, tavern licences let people drink or eat. Restaurant licences do not.

"Let's say I wanted to open another place here in Te Atatu and I'm looking at the business case: How many meals can I sell? Then, can I stay open at night and show the Warriors game? No. Can I do Sunday afternoon jazz and drinks? No. There's lots of things I can't do because I can't get a tavern licence."

Smales, it should be noted, isn't a yahoo out seven nights a week. Forty last month, the former scientist, who analyses data for the kiwifruit industry, has three young children and talks of developing DIY skills during home renovations.

For the record he doesn't want to open another place. Neither do any of the other 10 or 11 active members of Waltag.

Smale believes the group, which coalesced around a Facebook page started three years ago, cuts across political lines.

"On the right there is the neoliberal view that competition is the best thing in the world and on the left the slightly different view around freedoms.

"We don't hold shared views on lots of things. Our common ground is advocating for competition. That's it really.

"Fundamentally, if the trusts were nailing it and giving us what everybody wanted there would be no-one making any noise."

Ultimately, the man charged with nailing it is trusts chief executive Simon Wickham.

The former boss of Yachting NZ and West Auckland's own Trusts Stadium is also chairman of the selection panel for New Zealand's Olympic and Commonwealth Games teams.

Wickham says Waltag is "a voice" that needs to be heard, but not "the voice".

Feedback, he says, suggests a bigger group of people back the trusts and its responsibly run venues and bottle stores.

"The big drivers are profit from liquor coming back to the community where it was generated and not going offshore or into some private owner or organisation's pocket, and secondly that whole issue around proliferation and operation of bottle stores.

"Probably commercially the trusts could make more money by running more outlets … but personally I don't think you'd get our elected members saying, 'yeah go for it, make more money'."

Wickham acknowledges the trusts' legal hold on tavern and off-licences but argues that's not a monopoly in reality.

"The myth is that the trusts control everything and there can't be anywhere [else] to drink. That's just not true."

The trusts currently operate 11 venues. Wickham expects three or four more in the short to medium term, provided the numbers stack up.

The same number of new bottle stores could be added in the next few years, providing the population continues to grow.

"Most people in suburban West Auckland would live within 2 or 3km of their local bottle store and the feedback we get is that's kind of appropriate and that's enough."

Smale isn't after a surge in the number of bottle stores. He's doesn't even necessarily favour letting supermarkets sell alcohol.

He acknowledges alcohol-related harm, but doesn't think the trust model is the best way to control it.

Alcohol Healthwatch executive director Dr Nicki Jackson, who declared a conflict of interest because she lives in West Auckland, said the trusts could be doing more.

While acknowledging the likely benefits of the their existing control, they could further reduce harm by reducing trading hours, restricting advertising and prohibiting the sale of single drinks and very cheap alcohol.

Best international practice for regulating alcohol availability, she says, is a government- or state-run monopoly controlling the number of outlets and how they operate.

"Alcohol is the most harmful drug in society, so our regulation needs to reflect this."

New Zealand's first licensing trust was established in 1944. Twenty seven others have followed and 19 remain, including, in Auckland, Birkenhead and Mt Wellington.

West Auckland's trusts were created in 1972 and retained after a 2003 referendum which Wickham describes as a mandate. They are controlled by elected officials supported by a paid staff.

Nick Smale, spokesman for the West Auckland Licensing Trusts Action Group, with boxes of signatures in his home office. Photo / Doug Sherring, NZ Herald

Although there have been no new trusts since 1975, Wickham argues they're ahead of their time in a "social enterprise space".

"The whole concept of things being owned and giving back locally, lots of corporates are trying to do that in some way. Some of it's a thin veneer, some of it's real, but this is very real."

This financial year, the trusts will redistribute $2.5 million. Last week the board agreed to raise that to $3.5m in the following 12 months.

Part of that $2.5m is tied up in the trust's third annual Mission Dollar Mission — an initiative that lets the public vote which community groups get grants. This year, 48 organisations will get up to $68,000 each for environment, education, health or sporting projects.

Data compiled by Waltag shows the trusts' annual profit in each of the last five years for which the financials have been released was $6.35m, with $786,000 - 12 per cent - given back.

The amount returned includes commercial sponsorships, almost $900,000 in total between 2013 and 2018.

Rejecting Waltag claims the bulk of the trusts' revenue comes from investments rather than the alcohol business which provides its raison d'etre, Wickham suggests protecting income from venues, bottle stores and investments allows long-term viability.

"We have to focus on the big picture and growing the total pool of funds to give back."

Waltag has one more issue: It claims the trusts' transparency is not what it should be.

Dissatisfied with responses to requests under LGOIMA, the local government equivalent of the Official Information Act, Smale complained to the Ombudsman, who is investigating.

The trusts, he believes, are "hiding" their "shortcomings" to protect "a dud deal for West Auckland".

Wickham believes the trusts have met LGOIMA requirements.

"The Ombudsman will give us the advice and if they think we've erred on the wrong side, we'll put it right but that remains to be seen."

Alcohol Healthwatch executive director Dr Nicki Jackson says alcohol is the most harmful drug in society. Photo / 123RF

Waltag has one official victory. Smale complained to the Advertising Standards Authority about a claim made in trusts marketing blurbs for six years. The trusts pulled the wording before Smale won on appeal.

Another Waltag gripe is that there's no full public list of grant recipients and amounts. Wickham says this year's annual report will contain a list - barring commercially sensitive sponsorships.

Does Smale think Waltag's scrutiny has changed the trusts' behaviour?

"We can't for sure say that the increase in distribution of funds is resulting from the scrutiny … Perhaps that's us, perhaps they would have made that decision otherwise.

"They've also published minutes on their website. There's hardly anything in them, but at least they're there.

"I think they are reacting and that's positive but they've taken a step where they need to go 100 metres."

The elected presidents of the Portage trust, Ross Clow, and the Waitakere Trust, Linda Cooper, would not be interviewed for this piece.

Clow initially said he would talk before an email from the pair's executive assistant said Wickham had been appointed to speak on behalf of all elected members. The email said emailed questions would be passed on to Clow and Cooper.

There's no doubt the trusts have significant support. Anecdotally, newer arrivals and younger residents may be more likely to support change.

A hurdle for Waltag is a general lack of interest in local body politics. Turnout for trust elections is even lower than for Auckland Council.

Smale says there's no decision on what might happen if they fail to meet that June 14 deadline to collect 28,000 signatures.

He'd "hate to think" how many hours a week he spends on Waltag but it's not sustainable.

"It takes an emotional toll more than the time because receiving a response to a LGOIMA request that you feel like is … I don't know what the right words are but taking the piss … it's an unpleasant experience, it's, 'Why on earth are these people being like this? Why can't they give a straight answer?' and it makes you a little angry. And so far there's been very little in the way of rewarding responses."

Wickham says change has been happening since the creation of a transformation strategy in 2012 and will continue.

"Our changes were already underway prior to Waltag being established and we'll be constantly iterating the business and trying to improve it."