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The Alcohol Regulatory and Licensing Authority (Arla) ruled that parts of the council’s local alcohol policy (LAP) were "unreasonable", including the proposal to cut off-licence hours from 7am-11pm to 9am-9pm.
Arla also ruled that a proposed moratorium on most types of bottle stores in North Dunedin, which the council hoped would help curb problem drinking in the area, was unreasonable.
The decision comes after parts of the council’s proposed alcohol policy were appealed by a number of organisations, including New Zealand’s two main supermarket operators, Foodstuffs and Progressive Enterprises.
Dunedin Mayor Dave Cull yesterday said he was disappointed with the decision and the council would consider appealing.
The decision sent a clear message alcohol legislation the Government had brought in could not work, Mr Cull said.
"We have now joined a growing list of councils who have been knocked back for providing solutions to their own circumstances.
"I will be meeting with my colleagues around the country to discuss how we can provide our own solutions to the sale and supply of alcohol and reduce alcohol-related harm in our communities.
"In the meantime, the DCC will be considering its options, including a possible appeal to the High Court," Mr Cull said.
In its written decision, the authority said the council provided "no evidence" that sales between 7am and 9am were associated with alcohol-related harm.
It also noted that council liquor licensing co-ordinator Kevin Mechen acknowledged during the appeal hearing the council was under the mistaken impression the maximum hours of sale in the LAP were a guideline and exceptions could be granted.
"This misunderstanding is evidence on unreasonableness as the [restrictions] cannot be said to reflect the policy sought to be implemented."
A proposed moratorium on liquor outlets in North Dunedin was unreasonable because it excluded some outlets including premium wine stores and breweries selling their own product.
"The moratorium creates a partial and unequal system as it singles out off-licences, but only some at that,’’ the authority said.Arla also sided with appellants in declining the council’s proposals for:
● A requirement that an application for a licence be accompanied by a certificate from the respondent’s planning department.
● A mandatory requirement that all applications for the issue or renewal of off-licences be accompanied by an alcohol management plan. The parts of the LAP which Arla ruled unreasonable have been referred back to the council for reconsideration.
The authority turned down an appeal from police and Dunedin Hospitality Group against the creation of a special licence for "entertainment premises", allowing them to operate between 5pm and 4am.
The decision said neither presented "any evidence" to support their concerns.
Police’s failure to present evidence was "notable and somewhat surprising", given they had submitted they would have to "stare down the barrel of another year of dealing with alcohol-fuelled assaults and disorder [that] we know could have been mitigated by this policy".