Licensing Decision Lauded For Prohibiting Buy Now Pay Later Schemes In Bottle Stores

A decision of the Auckland District Licensing Committee sends a strong message to alcohol retailers who engage in Buy Now Pay Later (BNPL) services in retail alcohol outlets.

AfterPay is such a BNPL service, and it offers consumers the ability to be almost instantly approved with credit. This service being used for alcohol retail purchases has been an issue that has been raised before, most recently sparking concerns from a credit risk advisory firm.

An application for a renewal of a bottle store, Bottle-O Queens Road in Panmure, was opposed by the Council Licensing Inspector and the Medical Officer of Health, triggering a hearing in late November 2024.

In a reserved decision released yesterday, the Licensing Committee noted that the applicant had previously faced a ‘ flood’ of negative comment for having BNPL services, after which they withdrew the service.

On renewal of their alcohol licence the applicant rejected having a condition prohibiting BNPL suggested by the Council Licensing Inspector. The application was then opposed by the Inspector and Medical Officer of Health.

During the November hearing, it surfaced that the applicant was concerned about the ‘unfairness’ of the condition being applied to its licence and not being imposed on other premises offering BNPL.

The Licensing Committee looked to the provision of BNPL services that would be offered, and were of the opinion that the provision of that type of service would contribute to alcohol harm in the community, based on the evidence provided by the Inspector, the evidence given on behalf of the Salvation Army and Alcohol Healthwatch, and followed the lead of the Hamilton District Licensing Committee in dealing with similar matters.

The Licensing Committee gave a clear message to the alcohol licensing inspectorate, " The Committee has an expectation of the Inspectorate that they will bring any Applicant before the Committee on renewal of licences if that is the case. As we have said, the Committee considers that there is the potential for alcohol-related harm from any premises offering such services…".

Alcohol Healthwatch welcomes the decision of the Auckland District Licensing Committee, and further puts bottle stores on notice regarding BNPL services.

"We presented evidence in the hearing that shows the use of BNPL services to purchase alcohol at an apparent and often advertised low cost and no interest, increases its perceived affordability. This can lead to increased consumption and related harm," says Executive Director, Andrew Galloway.

Alcohol Healthwatch and the Salvation Army had both previously made public submissions on the Government’s review of Credit Contracts and Consumer Finance Regulations calling for alcohol to be excluded from any BNPL services, citing extensive evidence of BNPL services adding another layer of harm related to alcohol.

The Salvation Army gave evidence in the November hearing, including that they had almost 200 clients that have significant BNPL debts amounting to almost $1000 per client. Evidence also included the fact that BNPL users often came from disadvantaged backgrounds. These clients were said to often struggle with multiple debts, poor financial literacy and face physical and mental health issues. Many were said to have been associated with significant family violence issues, struggling to break the cycle of addiction and poor financial habits.

"We are pleased to welcome the decision of the Auckland District Licensing Committee, and in particular the stern warning to any alcohol retailer that participating in BNPL for alcohol will likely see applicants face challenges from reporting agencies" says Andrew.

"There is no place for buy now pay later schemes for Aotearoa New Zealand’s most harmful drug".

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