The matter is due to go before the district licensing committee on Friday, just one day before the charity fashion show, which is due to take place at Wall Street Mall.
Up to 200 people are expected to attend, free food by Otago Polytechnic students will be provided and alcoholic and non-alcoholic drinks were to be on sale.
All proceeds will go towards Life Matters Suicide Prevention Trust.
The licence for the event has been opposed by the licensing inspector and police.
Alcohol harm prevention officer Sergeant Steve Jones said it was not appropriate for an event raising money for suicide awareness to sell alcohol.
He said the link between alcohol and suicide was well known and evident in recent research from the University of Otago that studied coronial cases of suicide deaths linked to acute alcohol use.
"Police will submit the object of the [Sale and Supply of Alcohol] Act cannot be met with this application. Proceeds from the sale of alcohol going to a charity focused on suicide prevention, as well as the consumption of alcohol at this event, is inappropriate and harmful."
The inspector’s report on the application for the special licence said the quality of the application was "high, with good detail provided".
It had no concerns about the proposed alcohol management plans.
"The relationship between suicide and alcohol, however, is well documented with examples given within police’s opposition report.
"Due to the known relationship between alcohol and suicide, the appropriateness of having alcohol at a suicide prevention fundraiser is questioned.
"The intent of this event is commended; however, it is unclear why alcohol needs to be a part of this event at all and the message including alcohol at such an event sends to the wider community."
In response, event organiser Tegan Rose Vickery submitted the show was "not about selling and making a profit from the sale of alcohol".
"It is about creating awareness for mental health and shining a light on a group of people who are doing amazing work and allowing them another platform to stand on.
"It is about my personal journey with mental health, an eating disorder, and my suicide attempt four years ago. I want to show people that they can make it out of a dark place by showing them my journey."
Ms Vickery’s submission said there would not be advertising of alcohol at the event and pointed out there would be non-alcoholic options and free food.
"We will still donate all profits from the show to Life Matters, as I have intended from the very beginning."
The medical officer of health had no objection to the licence application.
Life Matters Suicide Prevention Trust manager Clare Curran said the trust had only just become aware that a liquor licence was being sought for this event.
"We have been and are happy to be the recipients of any funds raised at this event because it is about supporting local fashion design.
"We would expect that any event involving alcohol that raised funds for charity to be well organised and appropriately managed and we have in the past been recipients of funds raised at events where alcohol was sold.
"We would approach any event fundraising for Life Matters that included alcohol sales on a case-by-case basis."
