(Image: Tina Tiller)
(Image: Tina Tiller)

OPINIONBusinessJuly 14, 2021

West Auckland trusts’ ‘fighting fund’ another symptom of a broken monopoly

(Image: Tina Tiller)
(Image: Tina Tiller)

The West Auckland licensing trusts’ control of alcohol sales is supposed to be for the benefit of the community. But, as Sam Learmonth writes, mounting evidence shows the trusts are more concerned about preserving their lucrative monopoly.

Generally speaking, when a democratically elected organisation starts spending public money during an election to ensure “the public makes the right decision”, it’s pretty clear something is not right. But according to recent reports, that’s exactly what the West Auckland licensing trusts did. In 2019, during the licensing trusts elections, the trusts set up a “fighting fund” to protect their monopoly of West Auckland alcohol sales, and ensure that a local community group couldn’t challenge its dominance.

When I read this news, I can’t say I was surprised. We’ve known for a long time there’s something terribly wrong with the trusts’ anti-competitive model, and this is just another example.

I’m a member of the West Auckland Licensing Trusts Action Group (WALTAG), the community group the trusts’ fighting fund was trying to stifle. WALTAG is made up of members of the public, all of whom share frustrations with the licensing trust model.

The Portage and Waitakere Licensing Trusts, collectively known as “the trusts”, have held a monopoly over alcohol sales in West Auckland since 1972. The main selling point is that by controlling venues and liquor retailers in West Auckland, profits are ostensibly returned to the community through the responsible sale of alcohol. While I fully support the responsible sale of alcohol in the community, I have significant concerns, as do a number of other community members, about how this model works. 

The trusts operate 26 liquor stores and nine bars (Photo: Supplied)

Not only does it create a dearth of decent venues in West Auckland, but the community benefit argument makes no sense considering the number of pokie machines in the trusts’ venues, and the fact that some of them have been notorious for arrests and violence.  The trusts’ 2020 governance effectiveness review obtained by WALTAG showed the organisations struggle to make any profit from their venues.

But what we took the most issue with was the trusts’ lack of transparency.

Time and time again, the trusts have been caught out making misleading statements to the public. There was the claim that West Auckland had the lowest rates of alcohol-related crashes. Then there was the claim it had returned 47% of profits to the community when it had never returned more than 23%. Many of the supposedly progressive trustees have been calling for the trusts to pay their staff a living wage for some time. However, reports revealed the trusts had voted against paying staff a living wage because it would not buy them any brand goodwill (not because it couldn’t afford it). This is all while the head office expenses continued to balloon, and the CEO’s salary climbed to over $500,000.  

In 2018, WALTAG began making numerous complaints to the ombudsman and Advertising Standards Authority about the trusts’ claims, many of which we won. However, the only way to change the trusts’ model is by way of a referendum, which can be triggered by a petition from 15% of eligible voters. The previous referendum was in 2003. WALTAG’s primary goal is to collect enough signatures on its petition to trigger a referendum – around 50,000 across both licensing trusts. The petition is still going, and we are nearing our goal.

In 2019, during the licensing trusts election, a few members of WALTAG (including myself) put our hats in the ring to try to get elected and make some positive changes from within. I had raised a number of issues with elected trustees and was increasingly disappointed by their unwillingness to engage, even when presented with evidence that much of the trusts’ behaviour was problematic.  

During the election campaign, we noticed the trusts had intensively increased their social media presence, with 240 posts being made in the four months of the election campaign, compared to the 48 posts in the four months before the election campaign started. Unsurprisingly, these posts highlighted the “benefits” of the trusts’ monopoly.

For WALTAG candidates this was difficult to counter. The trusts is a large commercial enterprise with significant assets at its disposal to spend on marketing. Despite running a campaign on the smell of an oily rag, we did manage to get two trustees elected, one on each trust. As a result of having those trustees elected, there have been a number of positive changes, including much more willingness to disclose information to the public in accordance with the trusts’ statutory obligations.  

However, the trusts’ increased advertising spend during and prior to the election did not go unnoticed. In July 2020 the presidents of Portage (Pam Nuttall) and Waitakere (Linda Cooper) licensing trusts appeared before a select committee inquiry into local government and were asked if the trusts used trust money during the elections to promote the monopoly or current trustees.

Cooper, a long-standing Auckland councillor who earns a $30,000 per year “honorarium” for her trusts role, vehemently denied such a suggestion. Thanks to the news reports about the “fighting fund”, we now know the truth.

Waitakere Licensing Trust president Linda Cooper (Photo: RNZ/Sara Vui-Talitu)

While Cooper now says the fund has been closed and denies the trusts spends public money on protecting the monopoly, it strikes me as particularly troublesome that local politicians, many of whom have a very strong financial incentive to keep the monopoly in place, are comfortable with public funds being used to attack a community group in the first place. The trustees are supposed to represent the community’s interests and ensure there is adequate oversight of the trusts’ financial decisions. 

The trusts have been caught misleading the public on so many occasions it gives me very little faith that they will simply do away with a fund of this sort in the future. But perhaps  that’s why a recent poll shows public opinion in West Auckland is changing, with 56% of respondents saying they would vote to end a licensing trusts monopoly. As we near our petition’s goal to trigger a referendum, it’s becoming increasingly clear that West Aucklanders want change, and that the “right decision” for trustees isn’t the right decision for the public.

Keep going!