Trust me on this

This article was originally posted in ‘The Hobson’ magazine March 2019 issue.

Long summer nights, barbecues, with a syrah or rose to hand. Life is good. No excess, no deprivation, and you have choice as to when and where you buy your alcohol. Unless you’re in West Auckland. Here, liquor supply is under the control of an entity called The Trusts.

Control

This means you cannot pop down to your local supermarket and buy a bottle of wine or beers. You have to go to a dedicated shop owned and operated by The Trusts. It also means that if you can’t just go any establishment for a drink. All taverns in the area are also owned and operated by The Trusts. And these are made up of two organisations, which virtually operate as one. They are the Portage and Waitakere licensing trusts. In the regard, you have little choice as to where you can buy alcohol and where you can have a drink.

Community benefits?

A liquor licensing trust is set up to give back its profits to the community. These usually come in the form of grants, household gifts, like a first-aid kit and other facilities. For example The Trusts Arena in Henderson. It all sounds well-meaning.

However, when you look at the actual return on investment The Trusts make you may think otherwise. They have a large real-estate portfolio, and a near-monopoly if you want to buy a bottle of wine, or just drink a glass of wine in a pub. The return back to the community on those assets and that monopoly is shameful. There is no competition. And no mandate to provide a return on all investments. So the situation just rolls along. Currently there is a petition in circulation to take down The Trusts. This is seeking support to have the continued existence of the trust set-up in west Auckland become a matter for the voters at the upcoming local body elections. Only time will tell if enough signatures are obtained and meaningful change brought about.

Less alcohol harm?

I move your location to the far north – Kaikohe. There are numerous booze retailers, people drinking in public and there is no trust area. Meaning provided you meet the necessary tests and get your consents, you can open a booze shop or wine bar. Levels of alcohol harm in both the far north of the country and in west Auckland are similar. So the notion of restricting and controlling alcohol is not having an effect on the harm excessive alcohol has in both areas.

I suspect many of you are surprised at the level of alcohol restriction in west Auckland. I suspect many of you are not surprised at the level of harm caused throughout New Zealand by excessive alcohol consumption.

A better system

To this end I have given much thought to a better system. One that is better at providing benefit to the community from the sale of alcohol. More which directs more funds to programmes to help people. Without the trust-like control. While my thoughts are solid around this issue, the final outcome or system needs refinement. The main purpose is to have a nationwide trust system which is tasked to distribute funds to community groups. They will help provide larger scale facilities for regions and help provide funding for alcohol harm reduction and treatment programmes.

What I think should happen. Abolish all existing alcohol trusts throughout the country. Then establish a new trust in each region or area. This organisation won’t hold any assets and is mandated to distribute funds received to benefit the local community. They will help provide larger community facilities and funding for harm and treatment programmes as required. And to help make this all happen? Quadruple the excise tax on all alcohol. This will raise money in the vicinity of $650m per year, which is fed back to the regions and areas. This would see a glass of wine or can of beer go up by say 20c.

Not the same as tobacco

This is not the be seen as a means to reduce alcohol consumption. It’s not like the tobacco tax. But it is a mechanism to fund much needed community requirements. It will better manage the harm caused by uncontrolled alcohol abuse. Each trust would run in a similar way to the way Lotto grants are distributed. This way “trustees” do not become incumbent or biased, for or against certain distributions. They would have open and transparent accounts, which show that administration cost is minor to redistribution output. And most importantly it will ensure viable treatment programmes receive as much funding as they require. This will ensure all those who need help, can get it.

The idea of an alcohol trust has merit, and Some, like the Invercargill Licensing Trust, run very well. I see a role for them, but not to control the retail or sale and distribution of alcohol.

I want to flesh these ideas out further and I would appreciate your thoughts and comments on this subject – email me at hamish@mhg.co.nz. We will be facing similar issues when cannabis is legalised. Maybe by getting a structure in place for alcohol, we can use a similar structure for those that blow on the pipe.