Liquor licencees urged to review conditions re higher fee liabilities
South Australia’s hospitality and wine producing sectors have been encouraged to review their liquor licence conditions and, where multiple licences are held, to consider consolidation in order to minimise exposure to new annual liquor licence fees to apply from 1 July. A warning issued by Finlaysons law firm which specialises in the wine industry.
It says the most significant impact of the new annual fees in the wine industry will be on smaller businesses which hold multiple licences (many hold some combination of Wholesale, Producer’s and Direct Sales), and on cellar doors operated under licences which allow trade into the early hours.
For the hospitality industry at large, the most significant impact of the new annual fees will be on venues with licences which allow trade after 2.00am (regardless of how often the licensee might actually trade that late).
The minimum annual fee for each licence will be set at either $100 or $700, depending on licence category and on the maximum licensed patron capacity of the licensed venue.
Substantial additional loadings of between $2,500 and $10,000 will apply, where the licence allows trade is past 2.00am, and depending on whether trade is allowed past 4.00am and whether capacity exceeds 200 people.
The proposed re-introduction of annual licence fees was announced by the State Government in mid 2010, when it foreshadowed a “risk-based fee structure to ensure each venue contributes appropriately towards the cost of its regulation”.
The introduction of annual fees has been pursued by the State Government since that time, despite strong industry opposition.
The State Budget assumed increased revenue from the new annual licence fees of some $3.6 million (from the approximately 6,000 liquor licences in the State), and increased expenditure by the licensing authority of $1.4 million “largely due to funding to implement the Liquor Licence Amendment Bill 2011, Code of Practice and for the administration of annual liquor licence fees”.
Late in 2011, the Liquor and Gambling Commissioner sought feedback from the industry as to how venues might be categorised as “high risk” and “low risk”.
The Commissioner recently released draft Regulations setting out the proposed fees, and has advised that the Regulations will be finalised shortly, and licensees advised of their fee assessment, due to be paid by 29 June 2012 for the financial year commencing 1 July.
Licensees now have a short window of opportunity to review their licences and their conditions of trade, to identify any reduction in trading rights that they may wish to seek, in order to reduce their exposure to annual licence fees.
Licensees need to take action now to review the licences they hold and the conditions of those licences, to identify any opportunities to minimise the cost to their business of the new licence annual fees. The licence fees are set by reference to the trading conditions on the licence, regardless of how often the licensee in fact makes use of those trading rights, regardless of whether or not the licensee’s venue has had any compliance or patron behaviour issues in the past, and regardless of the scale and profitability of the business conducted pursuant to the licence. As a result of changes in their businesses over time, or the need for flexibility in the past, many businesses hold multiple licences. The new annual fees will impose a cost in continuing to hold those licenses, so any opportunity to surrender redundant or little-used licences should be explored as a matter of urgency.
