HOTEL VALUES

Otago Daily Times, Issue 25800, 22 March 1945, Page 6

HOTEL VALUES

GOODWILL AND RENTALS NEED FOR CONTROL SUGGESTED (P.A.) WELLINGTON, Mar. 21. Presenting a supplementary statement to the Licensing Commission to-day, the Under-secretary of Justice, Mr B. L. Dallard, said it might have been inferred from his previous statement that he had advocated State control. He did not wish the commission to draw any such inference. Mr Dallard said the commission had heard a statement by the Commissioner of Stamp Duties as to the enormous figures set down for goodwill and high weekly rentals stipulated in agreements to lease licensed premises. “’This is common knowledge to almost every lawyer or accountant,” said Mr Dallard, “ and it was the burdensome overheads arising from such conditions, combined with their effect in inducing illicit practices, which moved some of the chairmen of licensing committees .to suggest that all leases and transfers should be subject to the approval of a licensing commission.” “ Monopolistic Expansion ”

After quoting what he termed excessively high prices for hotel properties, and giving examples of monopolistic expansion by certain brewery companies, witness added:— ‘‘The question arises, How is this to be checked or controlled? The commission is aware that there has been created a Land Sales Court, which is designed to keep general property values within manageable dimensions, and also to prevent inflation. On this analogy it would seem worth while considering whether some controlling authority should be vested with power to approve or determine the conditions of tenure of licensed prerpises if the expansion by brewery concerns is to continue.”

In 1940, 1941, and 1942, said the witness, there had been eight deaths in New Zealand from alcoholism. In 1939 the number was 11. The largest number of deaths from that cause since 1927 was 18, in 1929. In one-third of the cases of marital discord, drink was a contributory factor, witness continued. Half the number of habitual criminals at present m custody were addicted to drink, and in one-third of the cases recommended for release by the Prisons Board drink was considered to be a contributory factor in their criminal activities. No Encouragement

Cross-examined by Mr H. F. O’Leary, K.C., counsel for the New Zealand Licensed Victuallers’ Association, Mr Dallard said that a poll every three years to decide whether the liquor trade should be permitted to continue did not allow a sufficient period to encourage people to make an investment for the improvement of hotel premises. It might be a serious factor in the failure to rebuild.

Referring to an earlier statement that the liquor trade was a State-created monopoly, owned and enjoyed by private interests, Mr O’Leary suggested that Mr S. L. Patterson, S.M., in his report, had “ spread himself ” on the question of monopoly. Mr Dallard: Not unduly. He is a very thoughtful magistrate. In reply to further questions, Mr Dallard said that the trade had failed to provide properly equipped hotels with proper facilities for the orderly, wellconducted sale of a popular selection of alcoholic beverages at a reasonable price. He was unable to speak about the quality of the liquor. Mr O’Leary: Do you know of any complaint by the public about what is termed “ tying ” of houses? The public, as such, was inarticulate, said Mr Dallard. One knew that a system of trustification was likely to lead to serious repercussions, unless it were controlled in the public interest. Mr O’Leary: You cannot tell us of any complaint by the public because of the “tying” of houses? Mr Dallard: No, but I drew attention to it because of my own views and the views expressed by the English commission.

Mr O’Leary: What is the benefit of raising it if the beer-drinking public is auite content? Mr Dallard: I say it is undesirable that this trade should get into the hands of a few private interested companies.

“Tied” House Leases Mr O’Leary drew attention to witness’s statements about the payments made by licensees. “They know what they are doing when they enter into the lease of a tied house,” he said. Mr Dallard: I consider it is undesirable when people are dealing with a public service that they should go into it on conditions which will almost oblige them to break the law to carry on.

Mr O’Leary: That Is a very sweeping statement. At this stage the proceedings were adjourned till to-morrow.