Are cheap drinks prices of supermarkets and liquid stores harm the interests of restaurants and bars?

Wellington local bar employer point out that supermarkets and liquid stores low drinks prices harm the interests of restaurants and bars and they are eating away at the city’s hospitality industry.

Alistair Boyce is the manager of Backbencher Pub near the parliament, he said, legislation introduced that would set a minimum price per standard drink, across both off-licenses and on-licensed premises.

He said Wellington’s hospitality industry was in decline, because people were choosing the much cheaper option of buying alcohol at liquor stores or supermarkets, and drinking at home.

Restaurants and bars drinks prices are high because the drink service in restaurants and bars must provide meal and waiters’ service, which spending on waiters wages are 4-5 times of supermarkets and liquid stores.

Big off-licence outlets could buy in bulk, making purchasing cheaper. Liquor barns and supermarkets, they are often buying at significantly lower prices, and their margin doesn’t have to account for wages and service.

Hospitality Association Wellington branch president Jeremy Smith disagreed the hospitality sector was declining, but said it was under enormous pressure across the board.

What was happening now, which was not happening five years ago, was that businesses were closing, but not reopening. 

"Five years ago, one would close, and it would open again with someone who had a better idea." 

The impact of off-licence sales was not new, but the price difference was a big factor when it came to pre-loading – the practice of drinking at home before heading out to city bars.

"It's been a building crisis, it didn't just hit us overnight, and it’s something that's been going for some time.

"Why would people go into a bar and buy a Heineken for $10, when you can buy a dozen for $15?"