An economic review commissioned by the state government has endorsed planned liquor licensing reforms and made a scathing assessment of an earlier critique by the Australian Hotels Association.
An economic review commissioned by the state government has endorsed planned liquor licensing reforms and made a scathing assessment of an earlier critique by the Australian Hotels Association.
The government has used the review by The Allen Consulting Group to try and overcome concern about potential job losses and commercial disruption flowing from its proposed reforms.
The key changes include allowing liquor stores to trade on Sundays, allowing restaurants to serve alcohol without a meal, and introducing a public interest test for liquor licence applications.
The reforms have been welcomed by most industry lobby groups but have met strong opposition from the AHA, which believes the hotel industry will be the main loser.
“This is not a balanced approach, it’s a vindictive and anti-hotel policy,” AHA WA chief executive Bradley Woods said.
The planned reforms have also been questioned by the Liberal and Greens (WA) parties, which are concerned the Sunday trading rules could boost the dominance of Coles Myer and Woolworths.
The Allen report found that most other states have already adopted similar changes to those proposed for Western Australia.
The report concluded that Sunday trading for liquor stores was well entrenched and supported in most states.
“No substantive concerns or problems with Sunday trading are evident, nor has Sunday trading been found to adversely affect the hotel industry to any significant degree,” it concluded.
Similarly, it said, there was “no evidence of adverse impacts on the hotel industry” arising from restaurants having more freedom to sell alcohol.
It also played down the concern raised by the AHA that restaurants would become de facto bars.
The report found the majority of restaurants had remained focused on the serving of meals and exceptions to this pattern, once identified, were easily policed.
However, it noted that the introduction of gaming machines in hotels in NSW and Queensland around the same time as licensing reform may have ameliorated any losses in hotel revenue and masked the effect of regulatory changes.
The AHA is pushing for some form of compensation in WA, with gaming machines in hotels being one option.
The Allen report concluded the introduction of a public interest test for new licensed premises, to replace the more restrictive public needs test, would cause little disruption.
It may result in a limited increase in numbers of liquor licences within particular categories but there would not be a significant overall change.
The conclusions of the Allen report are very different to those reached by Economic Research Associates, which was commissioned last year by the AHA to evaluate reform proposals.
The ERA report said allowing liquor stores to trade on Sundays could cost hotels $145 million in packaged liquor sales and put 558 jobs at risk.
It also concluded that allowing restaurants to serve alcohol without a meal could cut hotel sales by $106 million and put 1,866 jobs at risk.
Allen concluded that the ERA report was based on erroneous data and poor assumptions that tended to exaggerate the impact of reform.
The AHA is planning its own counter-punch by commissioning a review of the Allen report.
Mr Woods believes the Allen review is deeply flawed, for instance by downplaying the importance of gaming machines in boosting hotel revenue in other states.
He also believes the review relies on broad generalisations and fails to delve into a ‘micro’ analysis of how the changes will affect the hotel industry.
He said hotels gained 80 per cent of their alcohol income from take-away sales, and the entry of Coles and Woolworths into Sunday trading would threaten the viability of some hotels.
Racing and Gaming Minister Mark McGowan said the changes, which include the introduction of the new ‘small bar’ licence, would encourage diversity and innovation within the liquor industry.
“These initiatives will encourage the development of a vibrant, yet low-risk, drinking environment tailored to changing expectations in the community and the business and tourism sector,” he said.
