LCQ Alcohol Licensing Fees and Renewal 1 — Questions and Answers
Question 1: Under the Sale and Supply of Alcohol Act 2012, what is the basis on which annual licence fees are calculated in NZ?
- A flat fee that is the same for all licence types
- A risk-based fee based on the licence type, trading hours, and the nature of the business (Correct answer)
- A percentage of annual alcohol sales revenue
- Fees set by the individual District Licensing Committee for each premises
Correct answer: A risk-based fee based on the licence type, trading hours, and the nature of the business
Annual licence fees in New Zealand are risk-based, calculated according to factors including the type of licence, the hours of trading, and the risk profile of the premises (such as whether it is a late-night venue).
The Sale and Supply of Alcohol (Fees) Regulations 2013 establish a risk-based fee system. Premises are assigned to fee bands based on factors such as trading hours, whether they trade late at night, and the type of licence. On-licences for late-night entertainment venues are in a higher fee band than, say, a restaurant with limited hours. This reflects the higher regulatory burden and risk associated with different types of premises.
Question 2: In NZ, when must a licence renewal application be lodged with the DLC to ensure the current licence remains in force during the renewal process?
- At least 5 working days before expiry
- At least 10 working days before expiry
- At least 20 working days before expiry (Correct answer)
- At least 3 months before expiry
Correct answer: At least 20 working days before expiry
The Act requires that a renewal application be lodged at least 20 working days before the licence expiry date to ensure the existing licence continues in force while the application is processed.
Section 127 of the Act provides that if a renewal application is lodged not less than 20 working days before the licence expires, the licence continues in force until the renewal application is determined. If the application is lodged late or not at all, the licence expires on the due date and the business cannot legally sell alcohol until a new application is processed.
Question 3: Under NZ law, how long is a standard on-licence valid for before it must be renewed?
- 1 year
- 2 years
- 3 years (Correct answer)
- 5 years
Correct answer: 3 years
Under the Act, most alcohol licences (including on-licences) are valid for 3 years before they must be renewed.
Section 121 of the Act sets the standard licence term at 3 years for on-licences, off-licences, and club licences. Special licences are event-specific and do not have a 3-year term. The 3-year cycle gives licensees regulatory certainty while still ensuring periodic review of their compliance record and the appropriateness of the licence conditions.
Question 4: Who must be notified when a licence renewal application is lodged in NZ?
- Only the DLC
- The DLC, the Police, the Licensing Inspector, and the Medical Officer of Health (Correct answer)
- The Police and the local council only
- No one — the application is a private matter between the licensee and the DLC
Correct answer: The DLC, the Police, the Licensing Inspector, and the Medical Officer of Health
When a licence renewal application is lodged, copies must be served on the Police, the Licensing Inspector, and the Medical Officer of Health, who each have the right to report on the application or oppose the renewal.
The renewal process mirrors the initial application process in that key agencies are notified and given the opportunity to comment or oppose. The Police review the premises' compliance history and any incident record. The Licensing Inspector assesses compliance with licence conditions. The Medical Officer of Health may raise public health concerns. Each can file a report supporting or opposing the renewal, which the DLC must consider.
Question 5: In NZ, can a licensee object to the fee assessment for their licensed premises?
- No — fee assessments are final once made
- Yes — the licensee can request a review of the fee band assessment if they believe their risk profile has been incorrectly assessed (Correct answer)
- Only if the fee has increased by more than 20% from the previous year
- Yes, but only through the High Court
Correct answer: Yes — the licensee can request a review of the fee band assessment if they believe their risk profile has been incorrectly assessed
Under the Fees Regulations, a licensee can apply for a review of their fee band assessment if they believe they have been placed in the wrong band based on their trading profile.
The risk-based fee system requires premises to be categorised into fee bands. If a licensee believes their premises has been incorrectly assigned — for example, they have shorter trading hours or fewer patrons than the assessment assumes — they can apply for a reconsideration of the fee band. This is an administrative process through the DLC rather than a court challenge.
Question 6: Under NZ law, what is the consequence for failing to pay the annual licence fee?
- The licence is suspended until payment is made
- The licensee receives a formal warning only for a first offence
- Non-payment may result in the licence being treated as lapsed (Correct answer)
- The DLC can take civil debt recovery proceedings
Correct answer: Non-payment may result in the licence being treated as lapsed
Failure to pay the annual licence fee can result in the licence being treated as having lapsed, meaning the premises can no longer lawfully sell alcohol until the matter is resolved.
Annual licence fees are a condition of maintaining the licence in good standing. The Act and associated regulations provide that a licence may be treated as lapsed if fees are not paid. This has serious practical consequences as the business cannot legally sell alcohol while the licence is in an irregular state. Licensees should treat fee due dates with the same seriousness as renewal deadlines.
LCQ Alcohol Licensing Fees and Renewal 1
Under the Sale and Supply of Alcohol Act 2012, what is the basis on which annual licence fees are calculated in NZ?