New packaged liquor restrictions affecting landlords and tenants

Recent amendments to the Liquor Control Act 1988 (WA) (Act) will introduce new restrictions on packaged liquor which will affect landlords and tenants in respect of selling packaged, take-away liquor from their premises. 

While the original intention of the new restrictions was said to target large barn/warehouse style liquor outlets, also commonly referred to as “big box” stores (such as Dan Murphy’s and First Choice Liquor), the new restrictions are expected to affect some smaller outlets as well.

Further, the new restrictions will not be limited to “liquor store” licensed premises, but also other types of licences including taverns and hotels, which often have bottle shops.

It is not yet clear how far the restrictions will extend because the prescribed details (which will dictate the threshold required to be met before premises are affected) (Regulations) have not been published.  The Regulations are expected, at this stage, to be published in March 2019.

While the majority of the amendments to the Act have already commenced, the specific provisions the subject of this article will only commence once the Regulations are operative. 

New Restrictions

The new provisions prohibit the licensing authority from considering any application for either the grant of, or removal of, liquor store, full hotel and tavern licences (and any other licences prescribed by the Regulations) if: 

  • The proposed packaged liquor premises are situated within a prescribed distance from an existing packaged liquor premises. 

  • Both the proposed and the existing packaged liquor premises exceed a prescribed area,

(together, the Restrictions).

The Regulations will prescribe the distance between packaged liquor premises and the square metre area threshold to which the Restriction will apply.

At the time of writing, industry insiders are expecting the prescribed distance under the Regulation to be 5km and the prescribed area to be 400m2.  These perimeters, if enacted, will see the Restrictions operate far beyond the original intention of regulating only the big box liquor stores (whose size is usually more than 800m2, often well over 1,000m2.  Boutique/ Independent liquor outlets, taverns and hotels selling packaged liquor for takeaway with areas above the threshold size will also be affected by the Restrictions.   

The Restrictions will also affect existing packaged liquor premises (located within a prescribed distance from another packaged liquor premises) where the licence holder is seeking to expand beyond the prescribed area or alter the premises (if the existing premises already exceeds the prescribed area).

Further, the amendments to the Act also re-enact the “needs test” which was previously repealed in 2007.  That is, after overcoming the Restrictions, an applicant must then satisfy the licensing authority that the packaged liquor requirements of the defined locality have not been met already by the existing packaged liquor premises.  This needs test will apply in addition to the current public interest test.

Effect on Landlords and Tenants

The rumoured perimeters of the Restrictions, while unconfirmed, raise important questions for tenants and landlords of both existing and potential licensed premises with a packaged liquor component. 

Retailing of packaged liquor is a fundamental part of the traditional anchor tenant’s business model.  The introduction of the Restrictions could put a stop to the recent trend of having multiple anchor tenants on opposite sides of the same retail complex.  Further, the Restrictions may also adversely affect bars, pubs and hotels seeking to sell packaged liquor from their premises.

For existing packaged liquor premises, any expansion or refurbishment plans requiring an application to the licensing authority, or any desire to shift the premises to a different location, even if only a short distance away, will not be heard if the Restrictions apply.

Even if the Restrictions have been met, the re-introduction of the “needs test” will see tenants seeking approval to sell packaged liquor from their premises having to satisfy the licensing authority that the packaged liquor requirements of the locality have not already been met, in addition to satisfying the public interest test.  Landlords and tenants alike must be aware that, for example, it may not be possible in some cases to even apply for licensing approval, or the licensing authority may refuse a licence, for a second liquor store in a shopping complex on the basis that there is no need for it.