Liquor Licensing Update - January 2017
In 2016, the NSW Government commissioned 2 reviews into the current state of liquor licensing laws in NSW, known as the “Callinan Review” and the “Small Bar Licence Review”.
On 8 December 2016, the NSW Government released its response to both of these reviews. Whilst the Government has determined to maintain Sydney’s lockout and last drinks laws, it has determined to implement key recommendations of the statutory review, as well as other changes to liquor licensing laws. To effect these changes to the Liquor Act 2008, Government passed the Liquor Amendment Regulation 2016 on 16 December 2016.
1. Summary of Changes
The changes to liquor licensing laws in NSW include the following:
extending takeaway and home delivery alcohol sales from 10pm to 11pm across the State (from 16 December 2016);
a two-year trial of a later 2:00am lockout and 3:30am last drinks will be allowed via exemption for venues that offer genuine live entertainment, live performances or art and cultural events (from 16 January 2016);
extending the liquor licence freeze in the Sydney CBD and Kings Cross until 1 June 2018, with some minor changes to provide more opportunities for businesses to refurbish and improve their offerings to customers (from 16 December 2016);
increasing small bar patron capacity from 60 to 100 and providing automatic extended trading to 2am for small bars in the CBD and Kings Cross (from 16 December 2016);
improving the effectiveness of the Three Strikes disciplinary scheme for venues that repeatedly commit the most serious offences under the Liquor Act and the Minors Sanction Scheme for venues that sell alcohol to under-18s (no date currently proposed); and
introducing a provisional approval system for low-risk venues, such as restaurants and cafes, so they can begin liquor trading as soon as they lodge an application (from 31 January 2017).
Some of these changes have been implemented from 16 December 2016, with others to commence in January 2017.
2. Restaurants and cafes
A provisional approval system will be introduced on 16 January 2016 for low-risk venues including restaurants and cafes so that they can begin selling liquor as soon as they lodge an application for a licence.
Considering the current situation, which requires that an application for a new licence cannot be lodged until development consent is first obtained, and that almost all applications are taking many months to assess, this is a welcome reform that will improve efficiency for licence applicants.
To be eligible for provisional approval the intention to operate as a licensed premises must form part of the development application that is notified by the local council and the liquor trading hours must be consistent with the standard trading hours of 5 a.m. to midnight Monday to Saturday and 10 a.m. to 10 p.m. Sunday. It is intended that the police and local council will be automatically notified of any new provisional licences through an online system.
3. Small Bars
The increased patron limit for the small bar licence from 60 to 100 is intended to make this form of licence more attractive to venue operators.
This change was on the basis of evidence from the Small Bar Licence Review that small bars have a low risk profile, and a modest increase in patron numbers would be unlikely to significantly impact this.
The small bar licence carries with it a number of important incentives to encourage its take up, including:
Lower ongoing fees
Exemption from additional risk loadings for late trading;
an exemption from the requirement to submit a Community Impact Statement where the local police and the Secretary are notified of the development application for the small bar use within the required timeframes;
an automatic approval of an extended trading authorization to permit trading until 2 a.m.; and
an exemption from the liquor licence freeze (in freeze precincts).
However, until now this licence has not been popular with venue operators, with only 49 small bar liquor licences being issued as at 8 December 2016. The increased limit of 100 patrons is intended to result in an increased use of this type of licence.
The 2 a.m. automatic extended trading hours will also be expanded to include small bars located within freeze precincts (although this will not override any development consent limitation on trading hours).
General bar and on-premises licences where the development consent permits the operation of a small bar will be able to convert to a small bar licence free of charge for a 12 month period, subject to some limitations.
4. Bottle shops
Following a proposal in the Callinan review, bottle shops will be able to trade for an additional hour, until 11 p.m., and home deliveries of alcohol will also be able to occur until 11 p.m.
A full evaluation of this extended trading period will take place after 2 years from its introduction.
5. Live entertainment venues
The lockout laws applying in the Sydney CBD and Kings Cross will be relaxed for live entertainment venues for a trial period of 2 years.
Eligible venues will have a half hour extension of the lockout and last drinks times applying to other venues in the precincts, with a 2 a.m. lockout and 3:30 a.m. last drinks.
To be eligible, a venue will need to be able to demonstrate both that it provides substantial live entertainment including after midnight and that it has a genuine focus on art, live performance and cultural events.
6. Landlords and financiers
Also announced on 8 December 2016 were proposed reforms to the Three Strikes disciplinary scheme to move strikes from a venue's licence to the individual licensee instead. Legislation to this effect has not been passed by parliament at this stage.
It is proposed that there would be some provision for escalating penalties to be imposed on venues themselves where multiple strikes are incurred by the same licensee, although detail in relation to this is not yet known.
It is further proposed that Licensees will be able to apply to have a strike lifted after 6 months if they can demonstrate that they have complied with any remedial action and can effectively manage the risks that led to the strike.
This proposed change will mean that strikes will no longer have an adverse impact on the hotel asset itself, meaning that on the change of operators (i.e. sale of a licence), the incoming licensee is not affected.
Please feel free to contact us if you would like to discuss these changes.