Bar community locked out of growth potential

When the NSW Government introduced sweeping licensing changes to curb alcohol-fueled violence from February 24, many in the business community expressed fears about what impact the laws would have on their venues.

Six weeks since the laws were enacted, the ripple effects are being felt by business within the CBD entertainment precinct – the area affected by the 1:30am lockout, and 3am ‘last drinks’ rules. Small bars with a capacity of 60 patrons or less are not affected, however most only carry licenses valid to 12am. Bars and clubs outside this precinct are not affected by the restrictions.

Ben Linsell, operating manager at the 24-hour Ship Inn at Circular Quay, said trade had been significantly affected by the lockout. Part of the Ryans Hotel group, the Ship Inn was popular among hospitality workers who would often arrive after midnight or the early hours of the morning to have a drink after knocking off.

“We do focus on the hospitality crowd, because if you’re going to be open late, you want people who have only started drinking around midnight. A lot of hospitality customers can’t get here by 1:30am so we are knocking a lot of people back,” he said.

“On the first weekend of the lockout, the new rules, a customer wasn’t inside at 1:30am. They were outside having a cigarette [but] we couldn’t let them in. They had bags inside. A security guard went inside to get the bags. He couldn’t find them. The man stepped inside less than two metres to point where the bags were and then went outside and then two Office of Liquor, Gaming and Racing (OLGR) officers approached and took all the details and gave us a warning.”

“Between 1:30 and 2:00 we’re just losing at least 50 per cent of our crowd. From 1:30, the pace at which we empty, it’s just so quick,” he said.

Mr Linsell argues that those hotels located outside the lockout precinct are experiencing an unfair pick-up in trade simply because of where they are located.

However, businesses outside the precinct do not believe the laws are encouraging trade.

A spokeswoman for The Star at Darling Harbour confirmed the casino still had its 24-hour license and was not affected by the lockout brought in by the NSW government. She said customers were coming to the casino at an earlier hour of the night since the lockout was brought in.

“As with all similar business we are noticing an earlier arrival ahead of the wider 1:30am lockout. However, our overall customer numbers have not increased,” the spokeswoman said, adding they have added more security and other measures due to the “new working environment”.

Jeremy Blackmore, co-owner and licensee of small bar Tio’s, and new Oxford Street nightclub Cliff Dive (both inside the precinct), told Dynamic Business that because he and his business partners hadn’t solidified their business model, they were better placed to “roll with the punches” and said it’s going to be a “very interesting time for licensed premises” in Sydney.

While Tio’s is unaffected by the laws, with a 24-hour license (operating to 4am) Cliff Dive is directly affected. As to whether Cliff Dive would still have gone ahead had they known about the laws, Blackmore says it definitely would have, albeit with a modified business plan.

On the issue of lost earnings in the 3-4am bracket, Blackmore says they are putting more effort into driving earlier trade. “What we’re losing is the potential to earn money, but it just means that we need to put a lot more effort into our earlier night trade – which we were planning on doing anyway – but its just kind of accelerated the process.”

Blackmore says the laws have affected their plans for growth in ‘huge way’.

“We were looking at other bars of about 120 capacity for that area, even though they close at midnight, but that’s not possible because there’s no new licenses granted for that area. We were looking at, probably in the next two years, doing a CBD bar, but that’s unlikely to happen now.

He adds they were disappointed that business wasn’t consulted in a more dynamic process, but when they discussed it with OLGR, police, and other bodies and interested parties, they do not believe they were consulted either. “We learnt about this legislation at the same time as the licensing police in Surry Hills, and the City of Sydney council, and they all needed to know as much as we do.”

City of Sydney Lord Mayor Clover Moore told Dynamic Business via email that effective solutions to late-night violence need to be implemented with the support of the community, businesses and all levels of government.

“I have also called for a joint City and State Committee including OLGR and the Police to assess new liquor licences, extended trading hours and increased patron capacities,” Cr Moore said.

“Sydney’s small bars have helped promote a different drinking culture that helps move us away from a binge-drinking mentality. The State Government has recognised this by exempting small bar licenses from the current changes.”

A spokesperson from the Office of Liquor, Gaming and Racing said the government would not be able to quantify the affect the licensing laws are having on businesses within the entertainment precinct, because it does not have access to their books, and has not spoken to individual businesses.” Do we know how individual businesses have been affected? Well no we don’t,” the spokesperson said. The laws will be subject to an independent review in 2016.

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