Liquor & Gaming NSW has released a report of its review of small bar licences and has recommended a number of positive changes with the aim of increasing the uptake of this type of licence including:

  • an increase in the patron limit from 60 to 100
  • the ability to convert an on-premises or general bar licence to a small bar licence free of charge within a 12 month period
  • expedited assessment of applications for small bar licences.

The current patron limit of 60 was identified as a deterrent to the take up of a small bar licence, with operators often preferring an on-premises licence instead. In fact, the review found that the vast majority of “small bars” operated under a different type of licence, such as an on-premises or general bar licence.

An on-premises licence is subject to the primary purpose test that requires that the primary purpose of the business must at all times remain something other than the sale of alcohol, so this type of licence tends to restrict the ability to operate as a true “small bar” and creates significant compliance risk for operators who choose this licence type, even if they also obtain a primary service authorisation.  The ability to obtain a small bar licence for up to 100 patrons would be a significant improvement over the current situation.  Existing small bars will probably need to amend their development consents before they could take advantage of the proposed increased capacity.

This increased patron limit would also act as an incentive for existing venues operating under a general bar or on-premises licence to convert their licences to a small bar licence.  However, this will only be possible where the development consent for the venue would permit a small bar.  Where the use permitted by a development consent is limited to a restaurant, for example, it would not be possible to convert the on-premises (restaurant) licence to a small bar licence without first obtaining development consent for the small bar use.  The report recommends a 12 month grace period, after the introduction of the increased patron limit, for existing on-premises and general bar licences to convert to small bar licences free of charge.

New small bar licence applications are currently exempt from the liquor licence freeze and the review acknowledges that there is evidence to support the continuation of the exemption even if the patron limit is increased.  However, the review refrains from making a decisive recommendation on this issue and concludes that this will need to be considered further following the completion of the Callinan Review later this month.

Also welcome news is the recommendation that additional measures be considered to expedite the approval of small bar licences to ease the regulatory burden on applicants and remove or reduce barriers to uptake of the small bar licence type.

The review will be reported to the Government, who are yet to respond to its recommendations.  We hope that they take its very sensible recommendations on board to reform this licence into something more genuinely reflective of what people want from a small bar that will encourage the creation of a vibrant, and economically viable, small bar scene in NSW.