Businesses locked by lockout laws

Pubs and Clubs

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A guide to the new lock out laws that could lock you out

The new liquor licencing laws seeking to change patron’s behaviour came into effect in Queensland on 1 July 2016, with venues across the State reporting initial adverse effects on trade.

What does this mean for yours or your client’s business?

image of pubs and clubs table

Safe Night Precincts ("SNPs")

SNPs are designated key entertainment precincts across Queensland. The SNPs are managed by local boards who in turn manage and plan for the precinct to address community safety issues. To check whether your business is located within an SNP, you can view the safe night precincts map here.

From 1 July 2016 ­ Phase 1

Business owners can no longer sell alcohol after 3am if located in an SNP or after 2am if located outside an SNP. Venues can however remain open to serve food and provide entertainment.

In addition, the serving of rapid intoxication drinks after 12 midnight is now prohibited. Rapid intoxication drinks refer to:

  •  Drinks containing more than 45ml of alcohol;
  • Pre­mixed drinks containing more than 5% alcohol by volume and/or containing more than 2 standard drinks; and
  • Those designed to be consumed rapidly, for example shots and bombs.

From 1 February 2017 ­ Phase 2

It’s all to change again in February 2017, when venues in SNPs will no longer be able to allow patrons to enter or re­-enter the venue between 1am and 3am.

Venues outside of SNPs and casinos will not be subject to such legislative lock outs.

If conditions imposing a lock out are included in a liquor licence then those conditions must be complied with regardless of these new laws.

The winners and losers

The new laws are targeting patron’s late night drinking behaviour. There will inevitably be winners and losers as patron’s become more discerning in their choice of venue.

winners and losers table

 

The additional burden on business

The implications for business in complying with the new laws may be significant for some operators. As well as the obvious impact on revenues as a result of the new trading restrictions, there will be additional costs associated with:

  • Increased security staffing costs
  • Increased administrative and operational costs
  • The need to have either new and/or mandatory upgrades to current security and patrol hardware such as ID scanners (ID Scanners can range up to $11,199 in the first year inclusive of service fees and $4,200 in the second year)

The combined effect of decreased turnover and additional costs will mean a lower EBITDA. This will also have an adverse knock on effect on yield and ultimately the value of the operators' asset and LVRs in respect of bank financing.

Penalties

The penalties for failing to comply with the changes are significant.

  • Breach of lock out condition ­ $12,190 per offence
  • Supply of rapid intoxication drinks after 12am ­ $12,190 per offence
  • Irresponsible service practices under the Liquor Act 1992 – can result in cancellation of licence or suspension of licence for 12 months

Watch this space

Since Phase 1 of the new laws took effect on 1 July 2016, some businesses in the State’s more popular nightlife zones are reporting up to 20% reduction in revenue in comparison to the same time last year.

With these changes here to stay and further change due on 1 February 2017, impacted businesses would be wise to prepare now. Late night operators will need to have adaptable business models to remain competitive in this new operating landscape.

If you are looking to assess the impact on your business when the remaining laws take effect, our Ferrier Hodgson experts can help. 

For further information on any of the above, please contact us.

 

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