Thursday, 1 June 2017

Treason

It was really encouraging to get this news today from the Australian site Brews News. The TLDR is that a Melbourne law firm is enlisting breweries that want to be part of a class action against Australia’s corporate brewers for breaching competition law by using tap contracts.

I’m in no position to tell whether the law firm, Adley Burstyner, have the ability to succeed, but even if they don’t it’s keeping the issue alive, while Australia’s ACCC take a long time with their investigation into the same practice.

Now, speaking as a legal lay person, the Australian Competition and Consumer Act 2010 and the New Zealand Commerce Act 1986 are probably intended to do the same thing. But it looks like the Australian law might have more to say about anti-competitive behaviour. I say that because Part 2, Section 27 of the NZ Act says only “No person shall enter into a contract or arrangement, or arrive at an understanding, containing a provision that has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market.” Now the Australian Act says something similar about entering into a contract that is “likely to have the effect of substantially lessening competition”, but it also outlaws “exclusionary provisions”.

My lay opinion has always been that New Zealand tap contracts breach the spirit of the Commerce Act, but might stay within the letter of it, because it takes thousands of them to collectively “substantially lessen competition”, while it could be argued that one on its own can’t substantially lessen competition. But that clause about “exclusionary provisions” might give the Australian Act more teeth.

So it’s conceivable that the corporate brewers in Australia are destined to be forced to stop this practice and maybe pony up a lot in fines or compensation for having done it all this time. But at the same time the Commerce Commission in NZ have already seen fit to deem the practice legal. They have their version of competition law and we have ours, and that’s the prerogative of nation states. Or is it?

The Trans Pacific Partnership, and potentially other future free trade agreements, has a little bit to say about competition law. What I saw when I looked into it seemed pretty vague. It basically says that members should have some competition law to eliminate anti-competitive behaviour.

But what if producers and manufacturers in one country, hoping to export to another that they’re in FTA negotiations with, raise the stakes? It would be highly fanciful to think that Australia’s smaller brewers, fresh from a legal triumph over that country’s mega breweries, might get involved in FTA negotiations with New Zealand or other TPP nations over the competitiveness of their beer markets. But what about free trade negotiations with Europe?

Is it treason to hope that a foreign power will bully us into getting our anticompetitive house in order?

Thursday, 25 May 2017

Be There. Be Herd.

To put the following rant in context, I'm looking forward to the Lions tour and at Hashigo Zake we're putting out the welcome mat for Lions supporters. And local supporters too of course. This is because we have faith that those following the tour are people we will enjoy having as patrons. This is in contrast to how we dealt with the Wellington Sevens when we felt compelled to close our doors for a couple of years because of the behaviour of patrons on the weekend of that event.

I got an email yesterday from a supplier of flags and similar promotional material. It was offering Lions tour bunting. I took a closer look assuming that the product would consist of team colours or logos. But no, the “Lions tour” bunting that they were offering consisted of pictures of people with their faces painted.


In fact what they’re offering is consistent with other messages and imagery I’ve seen surrounding the Lions tour. Here’s the image that takes up half of the screen when you go to http://www.nzlionsseries17.com/.


The upcoming Lions tour is part of one of Rugby’s most significant traditions. As a sporting contest and a spectator event it has certain qualities that even the world cup can’t match. And the games have been followed by operators of still and moving cameras for a century.

Meanwhile the era of professional rugby, synthetic rugby balls and fields with drainage have helped make the on-field action more spectacular and athletic than ever before.

So for a designer tasked with creating visual imagery to promote the tour, there are rich vaults of historic and contemporary imagery available to draw on. 

And yet for the Lions tour, someone’s genius idea is to paint a few faces and say “open wide”? It’s as if they’re going out of their way to exclude images of actual play in any promotion of the game. Contrast that with just about any big sporting event, such as the NBA Playoffs, where they're happy to make a collage of their most famous players in action shots to promote their playoffs.


I realise that there is a point to the choice of images made by the rugby union or their design agency, and it’s to make local supporters feel involved. And when prices for games are inflated as much as these have been, the vendors of tickets know that they need to provoke an emotional reaction from local supporters to persuade them to come.

But it isn’t just the Lions tour that does this. In the entire, pathetic history of the Wellington Sevens, I can’t recall ever seeing a poster, advertisement or banner that used an image of on-field action to promote the tournament. Instead the promoters concentrated on shots of spectators in costumes, more painted faces, and a shot of an Austin Powers impersonator.

In the case of the sevens, this insistence on telling spectators that they, and not events on the field, were the real story, was the seed of the event’s demise. When the Wellington Sevens began, the Hong Kong Sevens was (and still is) the ultimate such event. Without Hong Kong the whole Sevens circuit would never have happened. The event had legendary status then, for many reasons – the on-field spectacle, the exotic location and the party element. And in spite of the reputation, the party-goers somehow seemed to remain under control. (I base this on the one time I went, which was in 1997!)



From the start the Wellington event was promoted as a party. We New Zealanders are notorious for being - shall we say - slow to get excited. So while it’s unlikely that any advertisement ever mentioned alcohol, images of spectators dressed up, dancing, and yelling carried a code that didn’t need a lot of decrypting.


Year after year there would be a little hand-wringing about things getting out of hand, but every year the advertisements would go up depicting costumes, painted faces and revelry in the stands. The message was pretty clear. If you want to sit in your seat and take in the sporting action, this isn’t the event for you. But if you want to turn into an exhibitionist for a day, rock on up.

When the tide turned and there was consensus from the organisers, the city council and the police that the partying had to be curbed, the organisers were painted into a corner. The crowds who’d come to Wellington for some consequence-free partying got the message and stayed away. But spectators who might have wanted to go purely for the sport had been well and truly alienated, so there was no-one left to fill the yellow seats.

To cut a long story short, the sevens organisers got the patrons, and the consequences, that they asked for. So what kind of spectator is being encouraged to turn up to the Lions games? 


Friday, 28 April 2017

Negotiations

For a while now, some of us have been observing how alcohol licences are issued in Wellington, with a bit of concern for one particular aspect. And that is the practice of the Police telling applicants that they will oppose their applications unless they agree to certain conditions being written into the licences.

If and when Police object, the application goes to a hearing and everyone takes their chances with the District Licensing Committee. From what I've seen, the DLC overrules the objections of the Police (and the Medical Officer of Health) with surprising frequency. Nevertheless, for a lot of applicants the hearing and the time taken for it to happen are unpalatable, especially if they're applying for a new licence and any delay in the licence might delay their opening. (It's different if you're applying for a renewal.) So applicants tend to pay very close attention to any suggestions the Police have for avoiding a hearing.

Fortunately there’s an extremely useful website with the very exciting name of NZLII. It’s an archive of decisions by all kind of courts, tribunals and what have you. And it includes decisions by the Wellington District Licensing Committee and the outfit that has oversight over them, which is the New Zealand Alcohol Regulatory and Licensing Authority.

Now if you know the names of a few bars or bottle stores whose licence applications might have been contentious it’s pretty easy to study the outcomes of those decisions. For instance, here’s the news-worthy Siglo case, where Police tried to make Siglo accept a one-way door policy only to have the Licensing Committee rule against them.

Today I came across this one. It's from a hearing on Feb 7, 2017, with the decision dated March 2. The Police and the Medical Officer of Health appealed the renewal of an off-licence by the Wellington committee so it went to the national body to adjudicate. They not only rejected the appeal, they said something that strikes me as kind of extraordinary.
[79] Reporting agencies should be careful to avoid ‘negotiating’ conditions with an applicant in exchange for those agencies not opposing the application. Doing so risks creating the impression that they have used their statutory reporting function under s103 to achieve their own ends. While the interests of reporting agencies are undoubtedly of significant importance, and it is for that reason that they have been given a function under s103, the Authority would take a dim view if opposition turned on whether an applicant agreed with reporting agencies’ recommendations on conditions. The role of the Police and the Medical Officer of Health under s103 is clear. They are to inquire into the application and if they have any matters in opposition, to file with the DLC a report on those matters. The evaluative exercise under s131, and the imposition of conditions, is for the DLC alone and not for the Medical Officer of Health or the Police. It would be an improper use of their reporting role in s103 if that was used in a way that effectively usurped the DLC’s licensing function.

From what I know of these things, the behaviour that the New Zealand Alcohol Regulatory and Licensing Authority is saying should be avoided sounds an awful lot like the way Wellington licensing has been operating for the last two or three years. For example the 2015 decision regarding an off-licence application here incorporates extracts from a succession of emails that must pretty much fit the dictionary definition of a "negotiation". (Paragraphs 12-17, on pages 5 and 6.)

So if the New Zealand Alcohol Regulatory and Licensing Authority is saying that this kind of practice is against the intent of the 2012 Sale and Supply of Alcohol Act, but this practice has been routine for several years, what does it say about the licences that have been granted in this time? Do they need to all be reconsidered by the Wellington District Licensing Committee?

Getting more extreme, if a bar or liquor store felt coerced into accepting shorter trading hours, can they sue the Police for loss of income?

Incidentally - and for full disclosure - Hashigo Zake's two liquor licences (on- and off-premise) were renewed on March 2, with no conditions added. So if the Authority's comments have affected how these things are done in Wellington, we may have been an early beneficiary.