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The applicant, Manpreet Kaur, who also owns Sockburn Bottle-O, withdrew the application on Wednesday for an off-licence consent for the Memorial Ave store.
On Tuesday, starnews.co.nz revealed the Fendalton-Waimairi-Harewood Community Board requested the right to voice its opposition to the planned bottle shop at a district licensing committee hearing.
Fendalton resident and neighbour of the proposed shop, Isobel Anderson, was "absolutely ecstatic" the application had been withdrawn.
"I just didn't think that could ever happen," she said.
"It was so frightening someone could come in and upset a whole community. It's just such a relief."
Those who made submissions against the liquor licence were notified about the withdrawal by the district licensing committee on Wednesday.
Fendalton resident Ashley Seaford said the result was good news for the community and its young people.
"From the number of submissions clearly there was no, or little, support for this business in our neighbourhood," he said.