Liquor law changes could breach CER, committee told

Proposed changes to liquor laws could put New Zealand in conflict with international trade agreements and its obligations to Australia, a legal expert has told a parliamentary select committee.

The justice select committee is hearing submissions on the Alcohol Reform Bill, which proposes a wide range of changes to liquor control and sales regimes.

Stephen Stern, an international expert on intellectual property litigation, submitted evidence to it today for his client Independent Distillers (Aust) Ltd.

Mr Stern said there was "grave concern" that the introduction of regulatory powers that could prejudicially target one form of alcohol over another by restricting named products ran counter to agreements in the Closer Economic Relationship (CER) agreement between New Zealand and Australia.

"Steps that target RTDs (ready to drink) in particular ... would be clearly inconsistent with the principles of CER," he said in his submission.

"There is also a high likelihood that the legislation may breach articles of the World Trade Organisation Agreement on Technical Barriers to Trade."

Mr Stern said if the Government applied to change the New Zealand-Australia code, it would be likely to encounter "significant problems" from an Australian industry perspective.

"Another concern, as acknowledged by the Government itself, is that under the proposed regulatory powers, RTDs manufactured in Australia and not subject to New Zealand law could still be imported into New Zealand because of trans-Tasman arrangements," he said.

"This could encourage producers to move manufacturing offshore and cost New Zealand jobs and investment."

In a separate submission, a group of 13 retailers said there was a risk that proposed law changes could push customers towards higher strength products.

They told the committee in-store surveys showed nearly half of their regular customers weren't aware that products such as 8 percent Bourbon and Cola could be taken off the market.

"When asked what impact that might have, 80 percent of RTD customers indicated they would switch to mixing full-strength spirits if their favourite RTDs are no longer available at the same strength," their submission said.

"Moves to suppress RTDs -- particularly those that currently sit above beer but well below wine and spirits -- could backfire by driving heavier consumption."

The retailers said there was widespread ignorance about RTD drinking patterns, and no apparent awareness of how drinking patterns and alcohol products had evolved over the years.