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To sell alcohol in New Zealand, you need to meet the necessary requirements of the licence you want to apply for. If you operate a grocery store and want to apply for an off-licence, you need to qualify as a legitimate grocery store under New Zealand alcohol law. The products you sell will determine this. Tobacco products have some additional rules that you need to know about when applying for your licence. Therefore, this article will explain whether you can still get a grocery store off-licence when you sell tobacco products.

Alcohol Licensing in New Zealand

If you want to sell alcohol in New Zealand, you need to have a valid license. The kind of licence you need will depend on how you sell alcohol and where people will consume it. The table below sets out the various licence types.

On-Licence

Allows sale and consumption of alcohol on your premises, such as a bar or pub.

Off-Licence

Allows the sale of alcohol for customers to consume elsewhere, such as a grocery store.

Club Licence

Allows sale and consumption of alcohol on club premises for club members.

Special Licence

Allows sale and consumption of alcohol for a special one-off event.

To apply for a particular liquor licence, you must send your application to your local council’s District Licensing Committee (DLC). For an off-licence, they review your application and judge whether you:

  • comply with your licence’s regulations; and
  • will reduce the amenity and good order of the local area around your proposed alcohol premises.

Off-Licences for Grocery Stores

Under the Sale and Supply of Alcohol Act, there are strict specifications for what kind of premises qualify for an off-licence. Liquor stores qualify, but shops within dairies or convenience stores will not.

To qualify for an off-licence for your grocery store, you need to ensure you meet the definition of a ‘grocery store’. You meet this definition if your store:

  • has the characteristics you would expect of a grocery store, such as proper signage and store layout;
  • sells a range of food and household products; and
  • is in the principal business of selling food products.

Note that food products do not include convenience foods, such as snacks or ready to eat takeaways.

If you do not meet these requirements, then you cannot have an off-licence as a grocery store. You can only display alcohol in one area of your grocery store, and this includes alcohol promotions and advertisements. You can display low-alcohol and non-alcoholic beverages (less than 1.15%) in other areas if you wish.

Selling Tobacco at Your Grocery Store

If you sell tobacco products at your grocery store, you need to ensure you meet the law’s requirements for this practice. You cannot:

  • have tobacco products on display in your store;
  • advertise or promote your tobacco products;
  • sell to minors;
  • provide single cigarettes, small packs of cigarettes, or smokeless tobacco products; or
  • sell illegal cigarettes that do not meet legal packaging requirements.

Your staff should check the ID of anyone that looks under the age of 25 attempting to purchase tobacco products, including vaping products. You should have a senior member of staff check ID whenever someone asks to buy tobacco products. You should keep your tobacco products in opaque cabinets or under the till where customers cannot see them, except for at the point of sale. 

Can My Grocery Store Have an Off-Licence While Selling Tobacco Products?

When you apply for an off-licence, you will need to provide evidence that proves you meet the definition of a grocery store, such as:

  • details of your store layout;
  • the range of products you sell; and
  • verified statements detailing your gross annual sales revenue.

You must do this to confirm that your principal source of income is from the sales of food products and not another product. If your primary source of revenue is from something other than food products, you do not qualify for an off-licence as a grocery store.

For example, if 40% of your sales income is from alcohol and 30% is from food products, then food products are not your primary source of revenue.

Notably, when introducing measures to curb tobacco sales in New Zealand, the government increased the excise tax on tobacco products. When this happened, sales revenue from tobacco products for grocery stores increased because of the raised prices due to tax. Consequently, some grocery stores lost their liquor licences because the higher prices meant their primary source of revenue changed from food products to tobacco. 

However, the government has since changed the law so that this does not mean legitimate grocery stores lose their liquor licences due to increasing tobacco tax. Now, when you prepare statements of your gross sales revenue for renewing or applying for a liquor licence, you exclude the contributions of tobacco excise tax to your sales.

Key Takeaways

If you want to sell alcohol at your grocery store, you need to meet the requirements for an off-licence. One of these is that your primary source of sales income comes from food products. Because of increasing taxes, tobacco product sales may trump your food product sales. Therefore, when preparing evidence for your liquor licence application or renewal, you need to exclude the contributions of tobacco excise tax to your total income. If you would like more information or help with your tobacco sales requirements for liquor licences, contact LegalVision’s regulatory and compliance lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is the difference between an on-licence and an off-licence?

An on-licence is a liquor licence for businesses where customers buy and drink alcohol on the premises, like a bar. An off-licence applies to businesses where customers buy alcohol and drink it elsewhere, like a liquor store.

Can a grocery store have an off-licence?

If your grocery store’s main source of income is from food products, then you can have an off-licence. However, if something else is your primary driver for sales, such as the alcohol itself, then you do not qualify as a grocery store and will not meet the requirements for an off-licence. You need to meet the trading standards for an off-licence.

Can I get an off-licence for my grocery store if I sell tobacco products?

You can sell tobacco products at your grocery store and still have an off-licence if they are not your primary source of income. To manage this, you need to exclude tobacco excise tax when calculating your annual sales revenue.

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