LICENSING LAWS

Dominion, Volume 38, Issue 138, 8 March 1945, Page 8

LICENSING LAWS

Submissions Made To Commission MR. B. L. DALLARD’S REPORT Submissions that the present licensing laws were inconvenient and scattered, vague and anomalous, were made by the Under-Secretary lor Justice, Mr. B. L. Dalia rd. in a long report submitted in Wellington yesterday to the Royal Commission on Licensing. . . “They are unduly restrictive, he said, “and are not designed to meet changing social and economic conditions. The laws are ineffective in that they do not ensure a reasonable and adequate service to the public. 3 hey create a monopoly without adequate supervision against abuse and exploitation. In particular I would draw the attention of the Commission to the problems of redistribution of licences, hours of sale, tied and managed houses, and consumption of liquor by the members of the Maori race.” He expressed the opinion that a central board or tribunal would have to be constituted to solve the problem of the redistribution of licences. The suggestion that there should be a severe increase in the penalties tor illegal supply of liquor to Maoris was made by Mr. J. D. Willis, the Crown representative. in concluding his opening address to the commission. This course was advocated, he said, because of the activities of Hindus. “The evidence shows beyona doubt that they are a menace to the Maori communities,” he added. “That is iu.no way an over statement.” It was clearly established, said Mr. Willis, that reasonably large numbers of Hindus were living in no-licence districts in or ahout native pas. There was no prohibition on the supply of liquor to them, and there was a volume of evidence to show that they obtained liquor and distributed it unlawfully to Maoris. Prosecutions had taken place, but there was a considerable body of opinion that there should be imprisonment in the first instance for such offences. Islanders should be placed on the same footing as Maoris and for the same reasons, said Mr. Willis. They could at present be supplied at hotels with liquor, take it away lawfully, and then unlawfully pass it over to their Maori friends. Chatham Islands Conditions. “l am appalled, and I am sure the commission will be, at the situation existing in the Chatham Islands as far as liquor is concerned,” said Mr. Willis. The position called for urgent attention. Suggestions were advanced for the total prohibition of the sale of liquor of all kinds, for consumption off premises, to any person, irrespective of .race, for the abolition of one of the two existing licences and the improvement of the status of the other by making it a publican’s instead of an accommodation licence; for the enlargement of the living accommodation, and for the removal of the general storekeeping business away from the hotel business. The Islands Licensing Committee, in its report, referred to the moral position existing there. There was not a single teacher or representative of any religious denomination on the. islands. This was not a wartime condition. It had existed for many years. This had its reactions, more specially on the young people of the place. They ran round free of restraint and lacking all moral. instruction. Parties were held and drinking indulged in by both sexes. The /European population of 150 could, with few exceptions, be referred to as abstainers, said Mr. Willis, but the drinking by the Maoris was sufficient for the whole population, both European and Native, to be regarded as a community of heavy drinkers. Half of the island income was spent on liquor, and half of that taken by barrel or bottle, was consumed in homes away from licensed premises. Effective Control Wanted.

If the liquor industry was to remain a monopoly, said Mr. Dallard, then he suggested that the State, which created that monopoly, should also control it effectively, so that the public was served by an adequate number of properly equipped hotels, situated where required, and that each hotel had proper facilities for the orderly well-conducted sale of a popular selection of alcoholic beverages at a reasonable price and of a satisfactory quality. “It is the failure to do this, and the exploitation of that failure by the trade, that has led to the present conditions under which the public are compelled to drink in acute discomfort in crowded bars and to accept in most cases only the brand and quality of liquor that the particular publican' is forced to take from the brewer or wholesaler who is financing him,” said Mr. Dallard. “There are in New Zealand a number of independent licensees, and it is within my knowledge that many of these men are model hotelkeepers, conducting orderly, clean and comfortable hotels and strictly adhering to the spirit as well as the letter of the licensing laws. On the other hand it is only fair to say that many of the brewery-owned hotels also provide very fine accommodation. Nevertheless there is a danger, where the profit motive obtrudes unduly, specially where the interest of the licensee is a short-term one or where he has no interest at all, that the fulfilment of the duties to the public may become subordinated to the exploitation of the monopoly privileges, and this is particularly so where the monopoly rights become aggregated in the hands of an influential group who resort to ‘trust’ methods of trading. “There is also the danger—-(a) where there are more licences than are necessary to supply the needs of the locality ; (b) where an individual licensee is not sufficiently financial to purchase his stocks to the best advantage, or (e) where a tenant licensee is struggling under an excessive rent; that tile pressure of events may conduce to breaches of the law or to undesirable practices to the detriment of the public. “Public interest must be the paramount consideration, but whether this can best be served under a system of privately owned monopolies subject to effective control, or under a publicly owned monoply with the profit motive eliminated, is a matter for the commission. “Tied House” System. “Definite responsibilities have been placed on the holders of licences, and the proper discharge of those responsibilities by licensees is of primary importance in the scheme of control,” he said. “'To be effective, the scheme requires that the licence should be held by the real owner of the business, and that the licensee be free to conduct his own business in a proper manner, and bo personally and financially responsible should he fail to do so. - “It is notorious that for many years a considerable number of hotels in the Dominion have been ‘tied.’ and I believe that the tendency in recent years has been for the proportion of tied houses to increase. Precise figures are not available to the department, but returns prepared by clerks of licensing committees throughout the Dominion disclose that there are cases in which the name of the owner of the licensed premises as shown in the register is a brewery company, or where a brewery company is the lessee or mortgagee.

“The practice of tying houses incurred the displeasure of the Legislature as long ago as 1895, section 35 of the Alcoholic Liquors Sale Control Amendment Act of that year being designed to invalidate the practice. This section is retained as section 177 in the 1908 Act, but it is notoriously a ‘dead’ letter.” Mr. Dallard said he believed a conveyancing device at present extensively used to tie houses was a leasehold provision for reduction of rent in cases where liquor supplies were obtained from the hotel lessor. “I understand that in recent years, in addition to leasing houses to tied licencees, the trade has also instituted a system of installing salaried managers, and that this practice is an extensive and growing one,” said Mr. Dallard. ‘T suggest that, though the Licensing Act may not expressly say so, it. contemplates that the person who holds the licence shall be the person who conducts the business of the licensed premises, and that the practice of appointing salaried managers is an evasion of the spirit of tile Act. "The object of tying a house is to secure an exclusive outlet for the ownerbrewer's beer; the objects of installing salaried managers arc to secure exclusive

outlets for the owner-brewer’s beer and to obtain the retail as well as the wholesale profits. To attain the first object a hotelkeeper is placed in the position where it is .practically ruinous for him to stock any beer other than that produced and sold by the owner of the premises, irrespective of the brand, of beer demanded by his customers. To attain the second object a dummy is put in as licensee, partly because of the difficulty, if not impossibility, of securing licences in the name of the real owner of the business, and partly in many cases so that the dummy may be used to attract the penalties provided by the law tor breaches of the Act without endangering the licence. This object is secured by removing the manager immediately there is trouble which might result in an endorsement of the licence and replacing him with another licensee. “The tied house system in England is dealt with in the report of the English Royal Commission, and viewed with disapproval. The system has. I understand, been completely eliminated in Canada, where the brewers are compelled to sell their output to the Government, which in turn sells to the retail licensees. Central Board Advocated.

“The constitution of a central board or tribunal in New Zealand will, iu my opinion, be necessary if the problem o.t redistribution of licences is to be solved, said Mr. Dallard. “Such a board might also be given power to hear appeals against certain decisions of licensing committees, and authority to issue, general directions to licensing committees to secure uniformity of standard throughout the Dominion.” He suggested that such authority was necessary for the more effective control of a number of administrative tribunals. There was a. central licensing commission or board in some Australian States. “I suggest to this commission that the powers of licensing committees arc too restricted to enable them to have any effective eontrol'over licensed premises, said Mr. Dallard. “more particularly as there is no power to compel licensees to erect new buildings or effect such substantial alterations as will bring the premises up to modern standards so that they-pro-vide adequate accommodation for the public so long as the statutory prescription of six rooms is complied with, or to control the issue of licences in such a manner as to ensure that the holder, of the licence is the person who really conducts the business, or to prevent the tying of houses, or to insist that bar accommodation is adequate for drinking in comfort. . . “I believe that the commission will find that licensed houses are not distributed in accordance with present needs, though I lie actual number of licences may be adequate. Effectively Io redistribute the licences throughout the Dominion will, I believe, aS suggested earlier, require the constitution of a central board or controlling authority. If redistribution were attempted simply by permitting the holders of redundant licences to transfer them to other districts, very substantial sums would accrue to those fortunate enough to secure approval to such removal. I suggest that .consideration, be given to the adoption of a scheme similar to that used in some Australian States, under which a central board was given authority to acquire redundent licences at valuation, based on their existing turnover at time of acquisition and to ..allocate to and sell the licences in other districts at their prospective value in their new locality. The proceeds 'were substantial in Australia, and I believe they would be substantial in New Zealand. Chariness of Governments.

“Successive Governments have manifested some chariness-and reserve in effecting radical changes in the licensing law, because of the political implications which arise from the widely divergent public views held iu relation to licensing matters. There has developed over the course of years an influential group who have acquired a lucrative vested interest in the licensing trade, and who naturally seek to resist any movement that might interfere with profits or impose irksome restrictions. There are two other groups .-more socially minded —but poles apart in objective. One addresses itself to the judicious consumption of alcoholic beverages. and the other to the abolition of alcohol as a constituent.

“There is a growing philosophy that the way to cbntrol the consumption of alcoholic ' beverages is not to prohibit, but to rationalize. What is wanted is a licensing system that will serve the. public demand conveniently without being unduly restrictive and open to the present abuses.”

“Recent years have shown a large, decrease in the amount of alcoholic drinks consumed, and certainly a great diminution in heavy drinking. Many causes have operated to bring this about; for example, the higher price of beer and spirits; restrictions imposed by law upon the sale of drink, ete. Important social changes also have been operating, such as the influence of transport, outdoor recreations, and counter-attractions, such as the cinema and wireless; and the general educational developments affecting particularly young people, including specific instruction in the subject of hygiene and temperance. There is, broadly speaking, less temptation than formerly to spend time iu the public house. This growing sobriety of the nation is having a good effect, not only upon the health aud capacity of the individual, but. also upon the general standard of industrial efficiency.” Evidence of Analyst. Provisions under Ihe Sale of Food aud Drugs Act for the labelling of alcoholic liquors should be strictly enforced, said Mr. 11. L. Andrew, the first witness Io be called before the commission. As Dominion Analyst and Director of the Dominion Laboratory, he submitted a statement on matters connected with the control of the sale of intoxicating liquors, arising out of the work of the Dominion Laboratory for the Police, Justice, Health and Customs Departments. For instance, he said, a purchaser should not be led to believe that he was buying a liquor with the strength of brandy when the liquor was a fortified wine, nor should he be supplied with what was really a hop beer while the label indicated that it was beer. The question of labelling was involved with wine made in New Zealand, where the greatest proportion of the alcohol had been derived, not from the juice of the grape, but from added cane sugar. In some cases not more I han one-fourth of the alcohol could have been, derived from the grape. In his opinion the purchaser was misled when be bought such wine as grape wine. Misleading advertising was also governed by the Act and. if necessary, regulations should be made fo prevent distorted and misleading statements being published regarding the nutritive and other properties of alcoholic liquors. For example, misleading statements had been published regarding the vitamin content of beer, particularly as to its riboflavin content. The facts were that it was a relatively poor source of riboflavin when compared with milk.

Most of the wine sold as produced in New Zealand, had a strength of from 28 to 35 per cent, proof spirit. This was four to six times the strength of the beer now sold. The production of the lighter types of wine should be encouraged, particularly as grapes grown in New Zealand were of low sugar content. Public opinion was in favour of light wines, but at present the buyer of New Zealand wipe had practically no option but to take a fortified wine. Young people might well drink such wine thinking it was of the same strength as beer, whereas it was at least, four times and probably seven times as great. The sale of medicated wines should be prohibited. Almost without exception those now on the market were sold as containing meat extract and malt