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No vaccine passports were required for the hundreds visiting Queenstown Community Markets on private land in Gorge Rd, and most did not wear masks.
The market mirrors a "freedom market" in Nelson, set up after vaccine and mask-wearing mandates were imposed on stallholders at another market.
Markets spokeswoman Sarah Lyttle said outdoor markets were classified "retail" under the Red setting, so vaccine passes were not required if the venue was big enough, as their market was.
A press release also stated face masks were encouraged for those without an exemption.
However, stall-holder Neville Bryant, who is not vaxxed, said: "... they weren’t told not to wear a mask, but everybody knew they did not have to wear a mask".
University of Otago epidemiologist Prof Michael Baker said under Covid "shopping under Red" rules, "you must wear a mask when visiting shops, outdoor markets, banks and takeaway-only businesses".
"The law is very clear in this area," Prof Baker said.
"I think the big responsibility is on the stallholders to follow the rules, and if they don’t, then I would have thought they should be prosecuted."
Ms Lyttle said the new Queenstown Unity Trust that ran the market acknowledged the need to operate under current regulations and legislation, and undertook a full health and safety assessment.
Unlike the Queenstown market, Frankton’s long-established Remarkables Market insisted on vaccine passports and masked-up stallholders and customers.
"I can only talk about our market, but we certainly would not run a market that put the people who are [customers] or stall-holders at risk of Covid," Remarkables Park co-director Alastair Porter, whose business runs the market, said.
It was his understanding
markets required vaccine passes, but for him the issue was bigger.
"People involved in tourism in Queenstown have been really hit hard, and also this town has limited hospital facilities, so we’ll do everything at Remarkables Park we can to try and get this town back on its feet, and that includes things like keeping the market safe from the Covid perspective."
Mr Porter said he was not concerned if he lost any stall-holder to his new competitor.
"Frankly, I wouldn’t regard it as a loss."
Queenstown Lakes District Council regulatory manager Anthony Hall said, following a complaint about the new market, it was found it was legal under the district plan, and its food vendors were appropriately registered.