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Small bar laws stifling small brewers in NSW

October 6, 2016
Bitter Phew in Darlinghurst

Bitter Phew in Darlinghurst

A proposal to increase the legal capacity of a small bar in New South Wales has been welcomed by venue owners and small brewers.

The New South Wales Government is considering the recommendations of a review of small bar liquor licences, which included increasing the patron limit from 60 to 100.

The 60-patron restriction was simply not commercially viable in Sydney CBD, the Small Bar Association, NSW submitted to the review.

Just 49 venues in the entire state are listed as trading under a small bar licence. The list includes at least one venue that hasn’t even opened yet, and the association claims the actual number is actually significantly smaller.

“Four have closed and another four are actually on the General Hotel (Small Bar) Licence,” it says.

“Many of the bars listed… are so small that it is conceivable that a good proportion are unlikely to be in business in the next year.”

The association said many small bars are instead trading under General Bar or Restaurant licences, which allow for greater capacity but entail more onerous regulatory controls.

Game-changing: Bitter Phew
The capacity increase would be game-changing for Sydney craft beer bar Bitter Phew, co-founder Aaron Edwards told Australian Brews News.

He said that even though his Darlinghurst venue has space for many more people, he regularly has to turn patrons away, once the 60-person capacity has been reached.

Edwards said the extra numbers would have an immediate impact on profitability, while also giving him the certainty to reinvest in venue upgrades that would attract even more patrons.

“We would be able to rotate through many more beers sourced from independent breweries,” he said.

“It would also open up opportunities for interstate suppliers with minimum orders of nine kegs or more, which we simply can’t fulfil as it stands.”

‘Look at Carwyn Cellars’
The 60-person limit combines with a pub market heavily dominated by multi-venue groups to make Sydney a very difficult market for small brewers to penetrate, Bridge Road Brewers founder Ben Kraus told Australian Brews News.

He questioned how the owner of a small bar operating under this capacity constraint is supposed to expand and potentially see reward for the significant financial risk they take to contribute to the vibrancy of Sydney’s hospitality offering.

Bridge Road's Ben Kraus

Bridge Road’s Ben Kraus

“There’s no way that 60-seat venue is going to give you enough capital to buy a pub in Sydney,” he said.

“So it just goes back to the same old people who have all the money, all the same groups who own all the pubs.”

In contrast, Kraus pointed to a venue like Carwyn Cellars in Melbourne’s north, which started out in 2007 as a bottleshop, before adding The Backroom Bar at the rear, six years later.

This year the bar was expanded again when the business took over the shopfront next door, as well as adding an outdoor seating area.

“They just keep growing because that’s good business. There’s so many independent pubs and bars that do well in Melbourne – bars that just expand because they’re allowed to,” said Kraus.

NSW claims success
Nevertheless, NSW Deputy Premier Troy Grant claims small bars have been “a real success story” since their introduction in 2013.

“While Melbourne bangs on about its bars and laneways, in Sydney we have the bars, the beaches and the weather to actually enjoy them,” he said.

The NSW Government has committed to responding to the small bar review, together with the Callinan Report on the state’s liquor laws, before the end of the year.

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