Melbourne’s well-known rock pub The Tote Hotel closed on Monday due to financial pressures partially caused by the Victorian government’s new liquor licensing system. See here, or Google News “tote”.
I looked at the study which brought about the new system and it made me mad. So I wrote letters to some politicians about it. This is the one I’m sending to Tony Robinson. Keep in mind it’s a bit boringly written and I may have facts wrong. I’m a cartoonist, not a lawyer. My point is that the study is lacking in data, and the system that’s resulted is unfair, partially for that reason.
Dear Mr Robinson,
I’m writing because the sudden closing of Collingwood’s Tote Hotel drew my attention to the new “risk based” fee system of Victoria’s liquor licensing authority, and its potential effect on the smaller, “boutique” venues for which Melbourne has become well known.
I’m not a big pubgoer, but I enjoy and am very involved in Melbourne’s arts culture, of which the Tote is a widely acknowledged part.
I was disappointed to hear of the Tote’s licensee, Bruce Milne, being forced by financial necessity to give up on the venue. Part of his explanation was that Victoria’s new “risk-based” fee structure has made his continued tenancy financially unsustainable.
The study that informed the liquor licensing fee structure change was prepared by the Allen Consulting Group and is called “Alcohol-related harm and the operation of licensed premises”. It specifies the following risk factors that are likely to cause alcohol-related harm at licensed premises:
- late opening hours;
- patron intoxication;
- hotel gaming; and
- combination of late opening hours with patron intoxication.
A great flaw in this study, one that is repeatedly acknowledged in the document itself, is that its data is incomplete, specifically in the area of venue type.
The author/s, in compiling the study, were not able to differentiate in a substantial way between any one Victorian venue providing music entertainment (either live or recorded) and another:
“It is understood that most gaming, adult entertainment and karaoke venues are identified in the data set, and therefore adequately captured by the relevant venue type categories.
However, many live and recorded entertainment venues in the data are not captured by the relevant venue type category. Given this fact, results for the live and/or recorded music category should be interpreted with caution.”
“Note that the findings for licensees with live and recorded entertainment should be interpreted with a high degree of caution. It is understood that the unknown group of venues, which includes 2,094 licensed premises, most likely includes many venues with live and/or recorded entertainment…”
“In particular, live and recorded entertainment represents 462 licensed premises in the data set. However, it is understood that there are far more venues across Victoria that have live and/or recorded entertainment. Therefore, the unknown group of venues must contain many venues that have live and/or recorded entertainment…”
“Given the data limitations, the risk associated with live and recorded entertainment is assumed to be captured by the late opening hours risk factor for the remainder of this analysis.”
In other words: “Absent real data, we will assume that any venue providing musical entertainment after 11pm is “high risk”.
Furthermore, the authors had “incomplete” data as to the capacity of Victorian venues:
“Data is incomplete in some areas, particularly venue type and venue capacity. In relation to venue capacity, the implication of the missing data is that the nature of the relationship between venue capacity and offences in or near licensed premises cannot be determined through the analysis.”
So as far as determining the suitability of a “risk-based” fee structure, this all-important study has been written without any substantive data on the sort of venues actually found in Melbourne and their capacity.
As far as the study is concerned, a 1500-capacity warehouse dance party in South Melbourne is no different to a 300-capacity acoustic music venue in Fitzroy. Both are venues providing “live and recorded entertainment”, which is all the study knows about either of them. If they are both open until, for example, 1am, they are both classed as “high-risk” venues and must pay, at minimum, an additional $3180.00 per year for their liquor license.
Let me reiterate: two factors in determining how violent a venue is likely to be, namely what sort of music is presented there and the venue’s capacity, are not taken into account in this report!
The resulting policy makes use of a “venue capacity multiplier” which raises the licensing fee according to the venue capacity, but capacity and opening hours are the sole risk factors taken into account by the new system.
The Allen study details a risk-based liquor licensing model being adopted in Ontario, Canada which takes into account many more factors than Victoria’s:
“Those licensee or applicant risks assessed are: past conduct; liquor-related infractions; honesty and integrity; financial responsibility; and training and experience. Those premises risks assessed are: type; location; occupancy; activities; and hours of operation.”
This is a much more comprehensive system which rates licensees based on numerous risk factors. In Victoria, the main question is: how late are you open?
The Government assumes the result is equitable, because “large, late night venues will continue to pay the highest fees while smaller, earlier closing venues will pay relatively less.”
This sounds nice until one considers that many of Melbourne’s most vital and culturally significant venues, the ones upon which our reputation is based, are small venues which close late, and who depend upon the money they make in those late hours to continue to be viable.
These are the venues that will be adversely affected by the Victorian Government’s new, insufficiently researched policy. The Allen study says as much:
“Impact on behaviour
The sensitivity of licensees to different levels of fees is unknown. It may be that even a highly tailored risk-based approach to fees may not drive behaviour change if these fees represent only a small proportion of turnover.”
In other words: slugging huge, profitable venues with “risk-based” fees will not change their approach to keeping their patrons safe; they have no trouble paying the fees. Business as usual.
Only the aforementioned small, late-night venues, many of which operate on a financial knife-edge already, will be affected. And in some cases, the effect will be to bring about their end.
The current Government has previously experimented with liquor licensing policy impacting gravely upon small venues, namely the unsuccessful and unpopular “2 a.m. lockout” trials of 2008.
I would have hoped that failed experiment would have caused policymakers to think a little harder about what it is that makes Melbourne’s nightlife unique before wading into another “blanket solution” to a problem they clearly do not understand, and have not properly researched.
It may be too late for anything to be done about the Tote’s fate, but I would like to know your feelings about this issue, and the specific points I’ve raised, being that you, as Consumer Affairs Minister, have been the public face of the reformed liquor licensing system.
Are you concerned that the Allen Consulting study, and the revised fee structure which has resulted, are both poorly executed, and that the new system’s implementation will result in loss of livelihood and perhaps further closures of our smallest pubs and music venues?
I look forward to any further data or alternate viewpoints you’d care to share.