Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill

Given that this is my first opportunity to stand in this Chamber since the events of late Sunday evening and early Monday morning, I just want to join with the House in adding my concern and thoughts for all those who are still dealing with the ramifications of our recent earthquakes.

I think the bill that we are debating in the Committee today clearly demonstrates the effect of drafting errors. That is probably how I would describe—not necessarily drafting errors even, but, potentially, small oversights and the ramifications that they can have. I would certainly not describe the Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill as being substantive. In fact, it deals primarily with only two issues, one of which there was very little discussion about in the Justice and Electoral Committee, and that was the use of holding on-licences or off-licences or special licences by companies. That warranted very little discussion at the select committee. In fact, I will leave that to my colleague Peeni Henare—I know he had a great interest in that aspect of the bill—to expand on in more detail.

The clause that did cause some discussion was the title clause, and that was around the display of low-alcohol beverages. All of our alcohol legislation defines very clearly what alcohol is considered to be. Of course, as a layperson, you would just consider beer, mead, wine, and spirits all to be under the classification of alcohol, but there are some very specific definitions that for parliamentary purposes we need to build into what alcohol is and is not. This is for good reason: if you are going to have a requirement that someone, for instance under 18, cannot purchase alcohol, you need to define what alcohol is.

So, by definition, in our legislation, the thing that we are obviously most concerned about is the content of ethanol, because, of course, that defines whether or not something is going to have an effect on someone when it is consumed. That means, by definition, something that may label itself as alcohol—say, a low-alcohol beer—would, in probably all of our minds, fall under the definition of alcohol. It is a beer, it is advertising itself as a beer, it is branding itself as a beer, but if it does not meet the threshold of what alcohol is—the ethanol level must be 1.15 percent of more by volume—then technically, by law, it is not considered to be alcohol.

Why is this of interest to this House? Well, of course, Parliament not too long ago, a few years ago—3 years ago now, in 2013—passed some of the most substantive alcohol reforms this Parliament has seen in some time. A significant part of that piece of legislation was to try to acknowledge that the availability of alcohol in our supermarkets—which we legislated to occur in, I believe, 1999—meant that some people, for good reason, felt that we were now over-advertising and making alcohol far too freely available in public areas. For instance, young people, who are not meant to be purchasing alcohol or be exposed to its advertising, were being exposed to it, and you had to walk through alcohol sections to access other things like bread and milk. In fact, I heard a number of submissions during that legislation, which I sat on the select committee for, where people who may have had some issue with alcohol abuse pointed out that they found it very confronting to constantly be exposed to displays in that way.

In 2013 Parliament tried to remedy that by creating areas where alcohol displays and promotions could occur, and it would be a single area in a supermarket. All of us will be familiar now with areas of a supermarket that are just alcohol. They are confined. They are able to be partitioned off, of course. Because of our hours of display, you needed to be able to partition them off, particularly if you have a store that would be open outside those hours.

So look, all well and good. Parliament passed that legislation, I have no doubt, with the expectation that everything we would consider to be alcohol—regardless of ethanol level, if it advertised itself as such—would be in that area. But it was not because, by definition, the alcohol areas were only for alcohol, and a low-alcohol beer, for instance, did not meet that definition. So here we clearly had something that Parliament intended to occur but, by definition, it had not quite met its own test. Look, these things happen. It was nobody’s fault. It is absolutely why on this side of the House we are without hesitation supporting this bill. We are, in a sense, just putting out there what Parliament always intended to do—that is, if people want a low-alcohol beer product, most people are going to seek that product in an alcohol area.

I want to give some credit here because the grocery stores would have been within their rights to put those products in non-alcohol areas, but sensed that that was not what Parliament intended and did not. So as a result we effectively had supermarkets who were not selling those products at all because they were in this grey area.

That has given rise to the one issue that was of substantive debate by the select committee, and it was this question: if we are legislating—enabling now—low-alcohol beer products to be advertised in alcohol areas, do we need to create legislation that partitions them off and, by law, will not allow those products to be displayed anywhere else? Technically, a low-alcohol beer can now be displayed in those alcohol areas, but technically it could still be displayed next to the soda as well.

So that then became a question for the select committee. The select committee gave it good thought because submitters did raise the question of whether we could put in parameters that said that these are the only areas where they could be displayed. Obviously that is our intent. The question, the test, for this House becomes: can you easily draft that intent? Could you, for instance, find a way to make sure that a branded beer product was not displayed in a non-alcohol area if it did not meet the ethanol test? What if, for instance, it was ginger beer? It does not meet the ethanol test but brands itself as a beer. Would you then have to explicitly say ginger beer was not included? What if the ethanol test was met by a ginger beer? What if you said alcohol companies—well, most of our alcohol companies produce non-alcoholic products, so that does not work either. We ran through a range of scenarios, and it became obvious to us that we were going to have further unintended consequences, and we did not want to end up back here in a slow process to try to rectify that.

I want it put on record, though, that Parliament’s intention, the select committee’s intention, and, I am sure, the Minister’s intention is that products that for all intents and purposes are trying to mimic the look, feel, and brand of alcohol but simply have low alcohol levels in them should never be displayed in the general areas of a supermarket and should only be displayed in alcohol areas. That is what we have intended here and, in fact, we gave strong encouragement to officials, and very proactively they have already indicated there would be guidance drafted to that effect. So let us leave no question that even though we have not drafted in the reverse, we have simply been permissive around low-alcohol products going into the alcohol areas. We do not intend for that to happen in the reverse.

That was probably the most substantive debate that was had amongst many other discussions, because the select committee, of course, was drawn to a certain extent back into a debate around the alcohol culture of New Zealand. What benefit have low-alcohol products had? Have they reduced alcohol consumption in New Zealand? Have they become a substitute or have they become just add-ons at the end? We were interested in these issues, as any Parliament should be, when it is clear that we have a binge culture in New Zealand. So it was good to have had that discussion.

The discussion we should have been having, either alongside this bill or after it, though, is the discussion that Simon Power flagged that this Parliament would eventually have. He indicated that eventually he wanted there to be a discussion on issues around pricing, but claimed at the time—in 2013, when the Act went through—that we did not have the data from supermarkets to fully understand the way that they were using alcohol to draw people in. He said that once we had the data we would have that discussion. Three years have passed. It is time for that discussion. Price matters. We know that supermarkets have had a role in heavily discounting alcohol. I would say that this is the perfect opportunity for us to raise that question so that this important debate does not end here with a discussion around low-alcohol products.

Tēnā koe, Mr Chair. Thank you very much for this opportunity to take a short call on the Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill. My colleague Jacinda Ardern mentioned probably a better description for the title, if we are to look into the deeper meaning of “(Display of Low-alcohol Beverages and Other Remedial Matters)”. But, to pick up her closing remarks from her contribution, perhaps this should be called the “Sale and Supply of Alcohol (Making it Easier to Access) Amendment Bill”. The reason I say that is to touch on the points made by my colleague Jacinda Ardern, who has given me the onerous task of speaking to the, ah—

💬 Jacinda Ardern: Companies provision.

—companies provision. So new section 28(1)(ba) in clause 4 of this particular bill says: “(ba) any company within the meaning of the Companies Act 1993 that is not prevented by a restriction in its constitution (if any) from selling alcohol or from holding a licence (or a licence of the kind or kinds concerned); or”. That is a pretty low threshold. I say that in respect of the ease with which one can register a company under the Companies Act without requiring a constitution.

The requirements to register a company under the Companies Act have a relatively low threshold. Are we making this easier? Are we allowing for more rogue operators, or for those who are inclined in a particular way and trying to exploit a market, as my colleague Jacinda Ardern has mentioned, which would see basement prices for alcohol? Those are some of the questions that I have with regard to the particular threshold for those who are looking to sell alcohol or hold a licence through simply having a company registered under the Companies Act.

Of course, there are different circumstances for those who have a company constitution that does not allow them to engage in that. I can think of one particular example, and that is actually my marae. We have registered as a company. We have in our constitution very clear rules about the sale of alcohol, and that is quite simple: none. There is to be none within the premises identified in the constitution. So I think that is pretty clear. But what we are asking here is: are we making it easier for anyone to register a company in order to attain the ability to hold a licence? That is a serious question that needs to be considered.

I sat very briefly on the Justice and Electoral Committee when this bill was debated. It was, I think, Peter Dunne, the Minister who was in the chair previously, who described it quite well when he said it is like the tortoise and the hare. The tortoise will eventually win, but these are a slow progression of changes that will eventually achieve the goal of keeping our communities safe. I think that is an important thing to note. If anything, this Government is probably winning the mannequin challenge, which is going well on social media at the moment—it seems to be paused while the world is moving on, and that is just not quite good enough. Some of the recommendations from the reform were actually quite clear about pricing and display, and that is the purpose of why we are here today.

To the point around the technicality around the day—a Saturday, a Sunday, Waitangi Day, Good Friday. If Waitangi Day or Anzac Day falls on Saturday or Sunday, it then applies to the following Monday. I think that is pretty straightforward. It is one of those minor technical things that I think is in keeping with the times and the changes that happen when these types of bills come in. My colleague mentioned the unintended consequences, and here we are again going through some of those unintended consequences.

Otherwise, on this side of the House we do support this particular bill, but I do have that question regarding the Companies Act 1993 and the holding of a licence, and I wonder whether the Minister can answer that.

Sorry, I almost forgot to speak for a moment—I thought we were doing the mannequin challenge, as was laid down by my colleague who spoke previously, Peeni Henare. This is a good bill, and certainly, as we went through the select committee process, I think it actually, as other speakers have mentioned, brought up a bunch of issues that we possibly had not anticipated as we went through. I think, ultimately, it is eminently sensible, as many of the Government bills are, of course, because this is a Government that is moving so fast sometimes that to the Opposition it may appear that we are standing still. It is one of those things—such a blur, we have got so much on, and this is yet another good piece of legislation.

I think what we need to do in this kind of context is really look at what it is that we are trying to achieve. What there has been in New Zealand—as I think I mentioned in my speech in the second reading of this bill—is a growing trend for people to seek out low- and no-alcohol drinks. The sale of low- and no-alcohol beer is very much on the rise, particularly since we have lowered the alcohol limits for driving and those kinds of things. So what we need to do is ensure that when people go into supermarkets, for example, and want to purchase such products, they are easy for them to find.

With the way the law stands currently, if you walked into a supermarket looking for low-alcohol beer and went to the beer aisle, you probably would not find any, unless, of course, the supermarket is trying to stick to the spirit of the law, if not the letter of the law. The likelihood, or potential outcome, is that someone will walk out with full-strength beer under their arm, though that was not what they intended to go in and purchase. In this regard, what we are wanting to see happen is to make it logical for people.

Obviously, when the initial legislation was drafted it was thought that defining drinks by alcohol content made sense, but what we discovered as we explored this further is that, actually, that description really is not that useful. So this is about ensuring that people who are going in looking for low-alcohol beer or wine or mead can actually find it with the other beer or wine or mead and not find it sitting in the soft drinks section.

💬 Jacinda Ardern: Good old mead.

Good old mead. Who even knew about mead being sold in supermarkets? This is yet another one of the great learnings that we had during the select committee process. I thought mead was simply something that Friar Tuck made in the Robin Hood movies, but, no, apparently it is sold in our supermarkets. So if people are looking for those particular beverages, they will now be able to find them in the appropriate aisle.

The other point that I think is really critical is that if something is being marketed as beer or wine or mead, it is entirely inappropriate for it to be sitting alongside the Coke, Pepsi, and Sprite. Children who are going past those aisles are not then being subject to the sorts of beverages that we would normally associate with alcohol.

As we went through this process, clearly we had some lessons that were learnt. The fact that there is agreement around the House that this is the right course of action for us to be taking I believe helps to reinforce that we have arrived at a sensible place.

That is the prime part of the Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill. There are, of course, a few other remedial matters that are associated with that—obviously, particularly around looking at the idea of companies holding a licence. Again, that is pragmatic and sensible. It ensures that we have got some good legislation going forward. I look forward to when we can have the third reading of this legislation and put it into action.

Kia ora. This is a really interesting bill because, essentially, it amends the Sale and Supply of Alcohol Act, and within that Act, the definition of “alcohol” is a product whose content is 1.15 percent ethanol by volume. Under the Sale and Supply of Alcohol Act, that is what alcohol is. What we have discovered through this process is that, actually, through the food standard and through the ingredients of certain products and the process by which they are made—that is, if hops are included and through the process of fermentation, through the Food Standard 2.7.2, the process enables products to be labelled beer, Food Standard 2.7.3 says fruit wine, vegetable wine, and mead products are able to be labelled as alcohol, and Food Standard 2.7.4 is wine and wine products.

The reality is that the definition of alcohol is not only contained within the Sale and Supply of Alcohol Act but it is also contained within the Food Standards Code, which is how we have got into the dilemma that we have got. Under the Sale and Supply of Alcohol Act, only alcohol can be displayed in alcohol areas of supermarkets, but what that particular Act failed to do was to acknowledge that under the Food Standards Code there are certain products that, because of what they are made of and the process they are made with, can also be labelled alcohol when, in fact, they are not.

So this is an opportunity for legislation to actually get with the programme, and the reality is that in 2012 we had no low-alcohol products for sale in New Zealand. But there has been a huge explosion in the number of low-alcohol products that do not meet the definition of what alcohol is by content, and that market is actually quite huge. As of May 2016 that is 4 percent of alcohol sales, which is $14 million. In Australia, the size of that market is 20 percent, so if we equated that out to New Zealand, we are actually talking about a $70 million market.

I think that we had some incredibly robust discussion within the Justice and Electoral Committee. We did not choose to extend the definition of “alcohol” in the Sale and Supply of Alcohol Act. What we have done is chosen to ensure that the effects of the Sale and Supply of Alcohol Act now take into consideration products that, by ingredients and by process, also meet what we consider to be alcohol, so that they can now be displayed in a single area.

I am going to highlight that a bit because we did have quite a few submitters—we had 30 submitters and six oral submissions—and the one issue that many of the submitters were worried about was that the supermarkets would get to choose whether or not products—not by content but by definition in terms of the Food Standards Code—were contained in the alcohol section of the supermarket. With the agreement of the industry—I want to highlight that the supermarkets and everybody who submitted wanted alcohol products, whether they were defined by 1.15 percent ethanol or by what they were labelled as, to be displayed in one area of the supermarket. I think that consensus really has driven the changes that the select committee made. I know that other members of the select committee might not think that is a big deal, but I think it is a big deal, and I think that New Zealanders think it is a big deal. They want to see alcohol products sold only in the alcohol area of the supermarket, and this legislation will enable that. Thank you.

New Zealand First continues to support this bill. It is a very simple bill and it is a very common-sense measure, and I think that the Justice and Electoral Committee has done a great job in bringing it back to the House in the way that it now is.

I would have to say, just in passing, that I think that in terms of the principal Act there are many things wrong with it and that this Government has not done very well indeed in terms of the provisions of that Act. You can see it in a number of areas today. One of them is the fact that many country pubs and other organisations that wish to sell liquor, such as at race meetings and that kind of thing, are finding it very difficult to do so and to make a living these days. That is because the principal Act is pretty bad in the way that it deals with those issues. I feel very strongly, as do we all in New Zealand First, that those things do have to change.

In addition to that, there are other parts of the country in which liquor outlets are actually being placed in areas that are very sensitive, where they should not be and, by the way, where there are far too many of them. That is another issue that needs to be addressed in the principal Act. But those are not debates for today. They are something that I will certainly be having some comment on at a later time, but for the purposes of this particular, simple measure, New Zealand First is, as I have said, in support.

There are two main issues, as far as I can see. The first is simply this: we should not underestimate the intelligence of purchasers, who know what they want and are not likely to be influenced in their purchase by where the product that they seek is displayed in a supermarket. So it is appropriate that they should be able to find those products easily. It is simply a matter of freedom of choice and ensuring that they can find the products they are after with the utmost of convenience. That is why New Zealand First does support the provision in this bill that allows non-alcoholic and low-alcoholic products to be displayed in a single area along with alcoholic products. It is simply common sense. If you go into a supermarket, that is where I think most people would want to find those products, and now they will be able to do so.

The second issue is simply this—that there does need to be flexibility. I am glad to see that that is being preserved in the bill, because supermarket operators do know their customers and do know how to set out their supermarket so that they provide convenience for those customers in choosing their products, as I have said they will do. It is very appropriate that we leave it to the supermarket operators to decide whether to display these products in the single area or elsewhere or both. I think that is very appropriate.

As far as New Zealand First is concerned, this is a very common-sense bill. It allows that flexibility. It preserves the freedom of people to buy the products they want and to find them conveniently in the place they would expect them to be. Again, we will be voting in favour of the bill, but, as I have said, there are a number of other things in the principal Act that are much more important than this provision that need attention, and New Zealand First will be raising those again at the appropriate time.

It was an interesting debate that we had in the Justice and Electoral Committee. I just want to canvass the issue of whether or not low-alcohol products are additive or substitutive, because we had a bit of a debate amongst the submitters and the members of the committee as to whether or not these low-alcohol products actually increased overall consumption and whether or not people who chose to drink low-alcohol beers were actually, basically, substituting those products for full-strength products. This was not, I would say, a topic of great substance at the committee.

We heard one submission from Alcohol Healthwatch in opposition to the proposition that these products are substitutive. In fact, Alcohol Healthwatch argued quite strongly—particularly in its oral submission—that we should be looking to reduce the availability of low-alcohol products. The reason it said that was that it believed there was not enough evidence to suggest that people were replacing full-strength products with low-alcohol products, and because of that we might actually be increasing overall alcohol consumption, notwithstanding the fact that alcohol consumption in New Zealand is actually at 30-year record lows. That actually belies the claim from people who should know better that we are in some epidemic of a drinking crisis, or something like that. Actually, alcohol consumption is at record lows. Youth drinking is at record lows, as well. Youth binge drinking is at record lows. Youth drink-driving is at record lows. So, actually, the world is not going to hell in a handcart, as some would like to have us believe. The committee rejected that proposition.

Although the availability of low-strength alcohol products is a relatively new phenomenon, we did hear evidence from the industry—from Lion Breweries and others—and from supermarkets, that the category is growing exponentially. Certainly, the anecdotal feedback when you are in the community is that there are people out there who are deliberately choosing to enjoy a low-strength alcohol product—a low-strength beer, for example—when they go to a party because they are concerned about drink-driving, they are concerned about the tougher penalties for drink-driving and the reduced blood-alcohol limits, and because they want to be on their game or they have an event to attend.

There is a lot of anecdotal evidence out there about people deliberately choosing to substitute a full-strength product with a low-strength product, which is exactly why the category is growing so quickly and exactly why the bill has come before the House. We have this bizarre and abnormal situation, as has been canvassed by many speakers previously, where low-alcohol products cannot be placed with their substituted product, which is the full-strength product. We need to sort that out, and this is a bill that does exactly that.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 agreed to.

Clause 3A agreed to.

Clause 4 agreed to.

Clause 5 agreed to.

Bill to be reported without amendment presently.

House resumed.

The Chairperson reported the Geographical Indications (Wine and Spirits) Registration Amendment Bill with amendment, the Wildlife (Powers) Amendment Bill without amendment, the Charities Amendment Bill without amendment, the Substance Addiction (Compulsory Assessment and Treatment) Bill with amendment, and the Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill without amendment.

Report adopted.