Closing times revisited

By Eric Crampton 13/08/2015


I did a bit of consulting work for the Hospitality Association last year around bar closing times and attended some of the hearings in Nelson about the Tasman closing hours. A lot of publicans there made the case that while they very rarely used the long hours they were allowed, it was really valuable to them. Why? Because when an important sporting match is on half-way around the world, they want to be able to air it for their patrons.

There is provision in local alcohol policies for seeking special licences for special events. But, the cops there, if I recall correctly, in their evidence were pretty clear that they did not consider airing a rugby game to be a special event. There’d have to be more to it than that. And, on the publicans’ side, the impression was that the police were ridiculously heavy handed around granting permits and enforcing them. Further, the local licensing officer admitted that he’d never had any problems with the bars’ existing closing times.

And so Parliament has had to legislate around the cops. We now have national legislation in the works specifying, at a national level, when local alcohol policies’ bar closing times are suspended for major sporting events. National wants it only to be for All Blacks’ events; Labour wants it to be for all sporting events.

But none of it would be necessary if the police and medical officers of health were less obstreperous about bar licencing. From the chats I’ve since had with publicans, and from the news stories about police imposing conditions on new off-licences, the cops and medical officers of health are using their power to object to licences to enact, through regulation, the stuff they couldn’t achieve when they lobbied to have it included in local alcohol policies or national level legislation: things like minimum alcohol pricing and restrictive hours.

Terry Moe pointed out in the American public choice literature that the President’s veto power grants him some legislative power: if he can threaten to veto legislation that’s too far from his preference, he can shift the nature of the legislation that faces him. The same thing seems to be going on with the police, medical officers of health, and alcohol policy.

National legislation around bar closing times for special events treats a symptom of a bigger problem. More substantial fixes may be needed. Either somebody has to challenge the cops on this stuff through the courts, which is really expensive for a small bar or bottleshop, or Parliament needs to make a bigger shift.

I wonder what would happen if District Councils received, say, 10% of the alcohol excise from alcohol sold in their districts. Excise is meant to internalise the external costs imposed from harmful alcohol use. Some of that will be the costs of heavy drinking on the public health system; some of it will be policing costs. But some of it is just nuisance that local councils have to deal with and for which they are not at all compensated. That councils then are a bit ambivalent about local nightlife and pretty happy to let the cops dictate alcohol policy is not all that surprising. Shift the incentives, change the game.

Congrats to David Seymour for getting the current fix up to Parliament. But we might need something a bit bigger yet.

Update: Here’s the text speaking to legislative intent:

In response to concerns around champagne breakfasts and international sporting events outside the maximum hours, we recommend amending the Bill to permit special licences outside the maximum hours. Special licences may only be issued for a particular event or series of events, and should therefore permit such occasions without creating a way for licensees to remain open outside maximum hours on a business-as-usual basis.

Hat-tip to Graeme Edgeler, over in the NBR’s comments section.