Rhubarb co-owner Helen Wright said the Roslyn-based cafe and wine shop opened in November 2004 after the DCC granted licences to sell alcohol on the premises and also to take away.
The two businesses have run as one since then, but when Ms Wright applied to renew the licences in November 2011, the DCC advised it would be opposing the renewal of Rhubarb's off-licence.
''They explained that a mistake had been made in 2004 and the granting of the off-licence shouldn't have happened.
''The reason for the opposition to the renewal was that, with the upcoming changes to the Alcohol Reform Bill, it seemed there had been a few things that had loosened up along the way and that it was time to get back to the letter of the law.''
Ms Wright said she and her partner Sam Kerr had debated the legislation at length with the DCC and the Ministry of Justice, and despite DCC and ministry attempts to help the business fit within the legislation, she had received a letter from the ministry in February this year saying her application to renew the licence had been turned down.
She said the news had left her ''a little perplexed'' because it meant Rhubarb's wine shop would have to close.
''The actual problem with our business is that we are trading an off-premise wine licence in the middle of a cafe and the law states that while one section 'allows the sale of liquor as an appropriate complement to the kinds of goods sold in the premises', it is followed up by 'nothing in [that section] shall authorise the grant of an off-licence in respect of any supermarket or grocery store, or any other premises on which the principal business is the sale of food or groceries'.
''Some would read that as meaning that all supermarkets should not be granted an off-licence because surely they sell more food than wine.
''Needless to say, this has been a hassle and at times a little more than slightly stressful.''
Ms Wright said she was not trying to overturn the decision. Rather, she was trying to warn businesses similar to her own about the repercussions of the issue.
''We accept that the Act has limitations and that our business model falls outside of the norm.
''We are trying to build awareness so the law can be changed.
''This decision will flow on to affect a number of other businesses throughout the country as they apply for renewals.''
Dunedin City Council liquor licensing project officer Kevin Mechen agreed.
He believed more and more businesses would find themselves in the same situation as Rhubarb.
A major cause was the authority's increasing focus on alcohol harm, he said.
''I think all licensees need to consider that their licences aren't forever. Times change, society changes and having a licence is not guaranteed.
''Sam and Helen have been impeccable licence-holders but unfortunately, the law is the law.''
The Rhubarb wine shop will close this Sunday, but the cafe will remain open with an on-licence.
