Liquor issues brewing for property owners and developers

Amendments to the Liquor Control Act 1988 (WA) which introduced new restrictions regarding packaged liquor premises came into effect in November 2019 and are already causing headaches for many.

A packaged liquor premises is a premises to which a full hotel licence, full tavern licence, liquor store licence and some special facility licences relates. Packaged liquor is liquor in a sealed container, sold for take-away purposes, to be consumed off licensed premises.

Restrictions were originally driven by harm and ill-health concerns and were aimed at large, “big box”, retail liquor outlets, such as Dan Murphy’s and First Choice Liquor. However, the restrictions as ultimately passed by Parliament have a wider scope and are also affecting other, smaller packaged liquor businesses.

Property owners and developers, particularly those involved with shopping centres and mixed use precincts and their tenants who sell packaged liquor, or that have a desire to apply for a licence to sell packaged liquor, should be mindful of the restrictions which are now in full effect and are proving to be very complicated with most applications being refused.

The restrictions

The new legislative provisions prohibit the licensing authority from even considering an application for the grant, or removal, or alteration of a licence for packaged liquor premises if:

  • the proposed outlet will have a retail section of 400m2 or more; and
  • will be situated within a prescribed distance from an existing packaged liquor premises with a retail liquor section of 400m2 or more.

The prescribed distance is 5 kilometres within the Perth metropolitan area, or 12 kilometres in regional WA.

Applications which can satisfy the square metre area and distance requirements may be lodged but are subject to a new, stricter legal test for the grant of a licence. The new test requires applicants to satisfy the licensing authority that the requirements of consumers for packaged liquor in the relevant locality cannot reasonably be met by existing packaged liquor premises.

This is proving to be a very high bar for applicants to get over. Once that test has been satisfied, applicants must then prove that the application is in the public interest and that other requirements under the liquor legislation are met.

Licensing authority interpretation and decisions

So far, the decisions of the licensing authority involving the new packaged liquor laws have revealed a very strict and narrow interpretation. Most applications for packaged liquor premises have been refused under the new regime.

Anyone interested in the outcome of an application involving packaged liquor premises should be aware that the work involved with an application, the timeline for obtaining a decision and the associated costs are all significantly different under the new laws.  Applicants need to go to considerable lengths to present an application with reasonable prospects of success. The application process is more complicated because of various factors including objections and interventions from other parties. The time involved can be many months and the costs potentially substantial.

There is no guarantee of success and if a licence is granted, it may be subject to several restrictive conditions such as, for example, only specified types of liquor products may be sold under the licence.

Unless and until any different interpretation of the new laws is applied by higher decision making authorities, the current interpretation stands.

Impact on property owners, developers and tenants
 

Property owners, developers and their tenants should be aware of the new laws and modify their expectations accordingly.

The tradition of expecting packaged liquor services at shopping centres and other retail complexes – often several outlets – is currently very uncertain. This trend may now possibly be a thing of the past as it seems highly unlikely approval would be given in respect of multiple retail liquor businesses at the one precinct, assuming that even one can get approved there in the first place.

An application to move a packaged liquor licence from one premises to new premises, even only a short distance away, for example from one side of a shopping centre to another as part of a redevelopment, will need to address the new laws.

Those interested in the outcome of licensing applications involving packaged liquor premises need to include in their property and business planning considerations the facts that the process involved is now significantly more complicated, the timing is much longer, the associated costs are greater and the outcomes more uncertain.

If you have any queries in relation to liquor licencing, please contact Jessica Patterson of Lavan’s Liquor Licensing Team or Peter Beekink of Lavan’s Property Team.