Tai Ping Trading-Mt Roskill Co. Limited [2003] NZLLA 902 (27 November 2003)

Last Updated: 25 January 2012

Decision No. PH 902/2003

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by TAI PING TRADING-MT ROSKILL CO. LIMITED for an off-licence pursuant to s.31 of the Act in respect of premises situated at 911 Dominion Road, Mt Roskill, Auckland known as “Tai Ping-Mt Roskill”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Mr J C Crookston

HEARINGS at AUCKLAND on 13 August 2003 and 12 September 2003

APPEARANCES

Mr J H Wiles – for applicant
Senior Sergeant M J Lopdell – NZ Police – in opposition
Mr D W Sara – Auckland District Licensing Agency Inspector – in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an application by Tai Ping Trading-Mt Roskill Co. Limited, for an off-licence pursuant to s.31 of the Act for premises known as “Tai Ping-Mt Roskill”, situated at 911 Dominion Road, Mt Roskill, Auckland. The applicant company already holds five other off-licences for premises situated in the Auckland area. It has held these licences for a number of years. All of those outlets trade under the “Tai Ping” name, and operate a specialty Asian retail grocery operation.
[2] The applicant now seeks to establish another store in the same genre. It sells foodstuffs such as fresh meat, fresh fruit, vegetables and a wide range of Asian food products. The applicant also intends to sell a range of twelve Asian cooking wines, and other wines which are mostly prepared from the fermentation of grain and not produced from grapes. The alcohol content of the cooking wines and other wines ranges from 15 to 54%.
[3] Section 37(3) of the Act provides that various types of wine, mead and beer can be sold by supermarkets and grocery stores. According to that sub-section a grocery store or supermarket can sell “Fruit wine that conforms to the Standard prescribed by Regulation 226 of those regulations, or any other Standard that may be prescribed pursuant to the Food Act 1981 in substitution for that Standard; ... .”
[4] On 20 December 2002 the law relating to food standards was changed, in order to continue the process of co-operation and harmonisation with Australia. In the new Standard fruit wine and vegetable wine were described in Standard 2.7.3 as:

“The product prepared from the complete or partial fermentation of fruit, vegetable grains and/or cereals or preparations of those foods, other than that produced solely from grapes.”

The new Standard comes under the New Zealand (Australia/New Zealand Food Standards Code) Food Standards 2002, and is prescribed pursuant to the Food Act 1981. The Food Standards were issued by the Minister under s.11C of the Food Act 1981. A note from the New Zealand Food Safety Authority on its web site explains that the Australia/New Zealand Food Standards Code replaces the New Zealand Food Regulations under the New Zealand Food Act 1981, and that food produced in New Zealand now must comply with the Food Standards contained in the Food Standards Code, Food (Safety) Regulations 2002 as well as other relevant legislation.

[5] When the application was publicly notified it did not attract any objections. The Police initially did not oppose the application. In a letter dated 16 January 2003, the Police later opposed the application on the ground of suitability. The opposition was based on the allegation that liquor was being sold on the premises without a licence.
[6] On 7 January 2003 the Inspector recommended that the application be forwarded to the Authority to determine whether the changes to the Food Standards under the Food Act 1981 permitted grocery stores and supermarkets to sell Asian cooking wines and grain based wines pursuant to s.37(3) of the Act.

Factual Background

[7] Nigel Stuart Robert Nelson is a Police Constable currently stationed at the Ponsonby Police Station. About mid-October he received an anonymous phone call. That person informed Constable Nelson that the premises known as “Tai Ping" 911 Dominion Road, Mt Roskill, was selling liquor without a licence. The informant said that there had been advertisements in the newspaper advertising rice wine for sale. He had been into the shop and had seen liquor for sale on the shelves. The informant had seen young Asian persons purchasing liquor, although he was unable to say whether they were aged under 18 years or not.
[8] A few days later Constable Nelson received in the mail a page out of the “Chinese Express”. It was dated 15 October 2002. One of the items advertised was “PRB Kwang Tung Rice Wine”, 560 ml for $1.99.
[9] Constable Nelson made enquiries with the District Licensing Agency Inspector, and ascertained that a licence had not been issued for the premises. At about 6.20 pm on 30 October 2002 he went to the premises of “Tai Ping-Mt Roskill”. He noted that there was no liquor licence at the principal entrance or signage to indicate the premises was licensed. He went to a shelf which he found was stocked with bottles of wine and bottles of beer. He picked up a 330 ml bottle of “Tsing Tao Beer” which contained 4.3% of alcohol/volume, and was priced at $2.95. At the same time he also picked up a 750 ml bottle of “Pearl River Bridge Glutinous Rice Wine” which contained 16.8% alcohol by volume, and was priced at $9.95. He noted that the shelves contained a large assortment of wines ranging widely in price. The most expensive was about $35 and the cheapest about $4. The beer could be purchased by the bottle as opposed to being in a pack of twelve. He went to the cashier’s desk, and paid for the items with cash.
[10] On Tuesday 5 August 2003 Constable Nelson spoke to the proprietor of the Home Brew Specialist Shop with whom he has had previous dealings on a number of occasions. He asked him to explain how brewing works and its limitations. He was advised that that typical wine yeasts will give a yield of between 12 to 15% alcohol, and beyond that range the yeast dies when it cannot tolerate the alcohol content any more. A specific spirit yeast existed, although in that case the maximum yield of alcohol was 22%.
[11] Michael Chan is one of the directors of Tai Ping Trading-Mt Roskill Co. Limited. It is part of Tai Ping Trading Company Limited, which holds five other off-licences. The other two directors of the Mt Roskill company are Jacky Luk and Stanley Lau. Mr Chan said they had not incurred any convictions under the Sale of Liquor Act 1989 during the years that they have been trading. The Mt Roskill business opened in October 2002, and they had expected to obtain a liquor licence without any opposition. The application for an off-licence had been lodged in May that year.
[12] Mr Chan said that when the Police visited the premises in October all of the company’s usual retail stock, including beer and wine had been delivered and set up for sale. It was a completely new business and Mr Luk, the manager, was also new to the business. The delivery and display of the stock coincided with the visit of the Police in the first week or so of trading. He said the premises carried about 4,000 product lines. All the beer and wine should have been removed from the shelves, given that the licence had not been granted at that stage, although it had been advertised in the newspaper. He said the licence was delayed because of the Auckland District Licensing Agency’s concerns towards the premises selling Asian wines.
[13] Mr Chan said that he regretted what had happened. It was a matter of inadvertence and lack of liaison between himself and Mr Luk. Unfortunately the Police visit preceded their opportunity to correct the situation. He emphasised that most of the wine displayed was cooking wine. He advised that all the cooking and other wines had now been removed from the shelves.
[14] Mr Chan said that Stanley Lau obtained a General Manager's Certificate in August 2003. He said that the company proposed to employ one other certified manager, and probably two of their existing employees will apply for a General Manager's Certificate.
[15] Mr Chan disputed Constable Nelson’s evidence as to the extent of the shelf space which was devoted to wine and beer sales. He demonstrated by reference to the photographs, that the amount of wine and beer displayed was less than indicated by Constable Nelson. Mr Chan’s evidence about the type of wine that he wished to sell was confusing. We have dealt with the application on the basis that the company would like to sell all types of Asian wines including cooking wines.
[16] Jacky Luk is one of seven directors of Tai Ping Trading-Mt Roskill Co. Limited. He is also the general manager of the store. He is not a director of any of the other “Tai Ping” companies, and he has not had any involvement in the other businesses prior to the setting up of the Mt Roskill company.
[17] Mr Luk said that when the store opened neither he nor Mr Lau, the other Mt Roskill company director, knew anything about liquor licensing, although subsequently he has made it his business to acquaint himself with the Sale of Liquor Act. He has obtained a General Manager's Certificate. He said that one other employee is also in the process of obtaining a General Manager's Certificate. Their turnover of liquor items was small, and at the time they opened, they had not given any thought to the legislation regarding the selling beer or wine.

Inspector’s Submissions

[18] Mr Sara referred to s.37(3) of the Act, which provides what liquor may be sold in the supermarket. In particular, he referred to condition (b)(iii) of the off-licence which relates to the sale of fruit wine that must conform to the Standard prescribed by Regulation 226 of the Food Regulations 1984 or any other Standard prescribed by the Food Act 1981 in substitution thereof. He noted that Regulation 226(6) states that, “Fruit wine shall contain not more than 15% alcohol. That is achievable through the complete or partial fermentation of grapes, fruit, vegetables, grains and cereals etc.” Mr Sara said that five of the fourteen different wines that the applicant proposes to sell have had salt added to them, and with the exception of one of them, all are over 15% alcohol.
[19] He referred to the new Food Standards which came into force on 20 December 2002. He said that previously any grain or cereal-based wine irrespective of alcohol content was excluded by Regulation 226 because it was not a fruit wine. He said it now appeared that rice, which was a grain, may however, have fallen within the definition of “fruit” because it is a plant with an edible seed. He said the new Standard does not now set a maximum alcohol content for the two types of wines. Instead of fruit wine being just a product of juice from fruit other than grapes, it may now be prepared from the complete or partial fermentation of fruit, vegetables, grains, and/or cereals, or preparations of those foods, other than that being produced solely from grapes.
[20] He noted that salt is not one of the ingredients listed in the new Standard, and therefore it is not possible for the applicant to sell wine with salt added pursuant to an off-licence. He said that fruit wine when mixed with ingredients other than those mentioned in the Standard, fall within the definition of fruit wine and/or vegetable wine products as defined in Food Standard 2.7.3. It followed that an off-licence granted to a supermarket or grocery store authorised the sale of wine or fruit wine, but it did not authorise the sale of fruit and/or vegetable wine product, and therefore it was not authorised to be sold in terms of the off-licence.
[21] It was also Mr Sara’s submission that any wine containing an excess of 15% alcohol by volume had been fortified with additional spirit, and fell within the definition of “fruit and/or vegetable wine product”. Nevertheless, he submitted that any wine containing anything in excess of 15% alcohol by volume should not be able to be sold.

Police Submissions

[22] Senior Sergeant Lopdell said that the Police opposed the application on the issue of suitability. That opposition was based on the company setting up, selling, and advertising the sale of liquor without a licence. He said that Constable Nelson’s evidence should not be regarded as a one-off event, but rather it was submitted, that breaches had occurred over a period of time.
[23] Senior Sergeant Lopdell referred to a letter received by the District Licensing Agency from Barbara Vague, Barrister and Solicitor, advocating that there was not a deliberate intention to breach the legislation. The same letter confirmed that there were five “Tai Ping” stores operating with liquor licences which were issued to separate companies with similar or identical directors and shareholders. He submitted that in those circumstances the unlawful sales of liquor could not have been accidental. The applicant must have known the law, and merely chanced its luck. It was for that reason the applicant’s suitability to hold a licence was very much in issue.
[24] He said the supermarkets and grocery stores that sold the type of product in issue appeared to be putting up two arguments. The first, was that due to additives put into the product it should be considered a food, and therefore was not subject to the provisions of the Sale of Liquor Act 1989. The second, was that the products in issue now fit within the new Standards.
[25] Senior Sergeant Lopdell then canvassed the meaning of “liquor” and the definition of “food” as defined in s.2 of the Food Act 1981. He submitted that any alcoholic liquid that contains 1.15% or more of alcohol by volume is “liquor” in terms of s.2 of the Sale of Liquor Act 1989, and therefore subject to the provisions of that Act. In terms of the definition of “food” in the Food Act 1981, that same liquid is a food whether it is intended to be drunk or added to other food products. The proposition that alcoholic liquids intended for cooking only were foods, and therefore not subject to the Sale of Liquor Act 1989, was incorrect.
[26] As regards the second proposition, he said that an off-licence is subject to the statutory condition set out in s.37(3) of the Act. That subsection specifies what liquor may be sold under an off-licence, and the Standards which pertain to that liquor. He noted that Standard 2.7.4 provides:

“ ‘Wine’ means the product of the complete or partial fermentation of fresh grapes, or a mixture of that produce and products derived solely from grapes.”
He said the Standard also defines “wine product” as:
“ ‘Wine product’ means a food containing no less than 700 ml/L of wine as defined in the Standard, which has been formulated, processed, modified or mixed with other foods such as that is not wine.”

He submitted that an off-licence granted to a supermarket or grocery store allows the holder to sell wine as defined, but it did not allow the licensee to sell “wine product”.

[27] Under Standard 2.7.4 he stressed that there is a list of foods that can be added to wine only during production. They are:

• [a] Grape juice and grape juice products; and
• [b] Sugars; and

[c] Brandy or other spirit; and
[d] Added water, where water is necessary to incorporate any permitted food additive or processing aid.
[28] He submitted therefore, that when spirits or other food products were added to wine after production the result becomes a “wine product” if it fits that definition. He referred to Constable Nelson’s evidence that when an alcohol content above 12 to
[29]

15% alcohol by volume is reached, the yeast is killed. Therefore, he submitted that any wine containing more than 15% alcohol by volume is a “wine product”, or if it does not meet that definition it is an alcoholic product other than wine. He said a wine with salt added is also an alcoholic product.

[30] He noted that Regulation 226 limited the alcohol content of fruit wine, vegetable wine and mead to a maximum of 15% alcohol by volume. He said the new Standard does not contain such a limit, although the maximum alcohol content that can be achieved through complete fermentation of fruit and vegetables is 15% alcohol by volume. It was therefore submitted that any fruit wine and/or vegetable wine that contains an alcohol content exceeding 15% by volume is a fruit wine and/or vegetable wine product if it falls within that Standard or is another alcohol product other than fruit wine or vegetable wine.
[31] Senior Sergeant Lopdell then referred to Standard 2.7.3 and said that it did not provide a list of food products that could be added to fruit wine and/or vegetable wine during production. However, it did provide a list of things that fruit wine, vegetable wine and mead could contain. He submitted that Standard 2.7.3 was confusing because when trying to apply that Standard to the provisions to s.37(3) of the Sale of Liquor Act 1989, that section allowed only a supermarket or grocery store with an off-licence to sell fruit wine. It did not allow the licensee to sell vegetable wine, nor did it allow the licensee to sell fruit wine product or vegetable wine product.
[32] Senior Sergeant Lopdell noted that the new Standard also covered wine made from the complete or partial fermentation of grains and/or cereals, and could include a product made from a combination of fruit, vegetable and grain or cereal. He said that rice wine would fall into the category of grain or cereal wine. However, under Standard 2.7.3 it was clear that grain or cereal wine is not fruit wine, vegetable wine or mead. Nothing in the composition referred to under that Standard refers to grain or cereal products. He submitted therefore, that rice wine and other grain or cereal wines were not fruit wines, and could not be sold pursuant to an off-licence issued to a supermarket or grocery store. Senior Sergeant Lopdell submitted, that an amendment to Standard 2.7.3 and Standard 2.7.4 would be required before the applicant could sell a large number of the products that it wishes to market.

Applicant’s Submissions

[33] Mr Wiles submitted that having regard to s.37(3) of the Act, the reference to Regulation 226 “or any other Standard that may be set” entitles the applicant to sell wines as defined in the new Food Code and Standards. Therefore, it seemed a fruit wine may include a wine made from cereal or rice. He said the new code does not prescribe the maximum alcohol content permissible.
[34] Mr Wiles referred to Standard 2.7.3 which employed the conjunctions “and/or” in defining fruit wine and vegetable wine, and referred to a product prepared from complete or partial fermentation of fruit and/or cereals other than that produced solely from grapes. He submitted it was also necessary to consider Standards 1.3.1, 1.3.3 (which refer to Food Additives and Processing Aids respectively) and 2.7.1 (which refers to labelling requirements for alcoholic beverages). Mr Wiles submitted a list of food additives by food types that may be used, and he noted that it was even permissible to add carbon dioxide.

Authority’s Reasons

[35] The issue is, what is the effect, if any, of the promulgation on 20 December 2002 of the New Zealand (Australia and New Zealand Food Standards Code) Food Standards 2002. The applicant wishes to sell a range of products commonly referred to as “Asian wine”. The characteristics of these wines appear to be an alcoholic composition which ranges from approximately 15% to 54%, with a salt content which is said to be so high as to render some of the wines unpalatable, and wines produced from grain.
[36] When considering these matters it is important to keep in mind that what is required is an application of the provisions of the Sale of Liquor Act 1989. Where any ambiguity arises from the application of the Standards, regard should be had to the policy of the Sale of Liquor Act, which is restrictive in relation to what products may be sold from supermarkets. A change in the Standard should not be taken as an indication of a change in the sale of liquor policy.
[37] That Act seeks to use for convenience, definitions found in Regulations made under the Food Act 1981. That Act, and its Regulations have as their focus issues such as food safety, and ancillary matters such as food labelling. The issue is not how Asian wine would be classified under the new Food Regulations, but their treatment under the Sale of Liquor Act.
[38] The Sale of Liquor Act defines “liquor” as:

“Any fermented, distilled or spirituous liquor (including spirits, wine, ale, beer, port, honey mead, stout, cider and perry) that is found on analysis to contain 1.15% or more alcohol by volume.”

[39] The applicant’s premises fall under the definition of a supermarket pursuant to s.36(1)(d). Therefore, as a consequence, s.37(3) becomes relevant. Section 37(3) provides as follows:

(3) It shall be a condition of every off-licence granted in respect of any premises described in section 36(1)(d) of this Act that no liquor be sold pursuant to the licence other than—

(a) Wine that conforms to the standard prescribed by regulation 219 of the Food Regulations 1984 (SR 1984/262), or any other standard that may be set, by regulations made pursuant to the Food Act 1981 or by food standards issued pursuant to that Act, in substitution for that standard; and

(b) Sparkling wine that conforms to the standard prescribed by regulation 220 of those regulations, or any other standard that may be set, by regulations made pursuant to the Food Act 1981 or by food standards issued pursuant to that Act, in substitution for that standard; and

(c) Fruit wine that conforms to the standard prescribed by regulation 226 of those regulations, or any other standard that may be set, by regulations made pursuant to the Food Act 1981 or by food standards issued pursuant to that Act, in substitution for that standard; and

(d) Sparkling fruit wine that conforms to the standard prescribed by regulation 227 of those regulations, or any other standard that may be set, by regulations made pursuant to the Food Act 1981 or by food standards issued pursuant to that Act, in substitution for that standard; and

(e) Mead that conforms to the standard prescribed by regulation 226 of those regulations, or any other standard that may be set, by regulations made pursuant to the Food Act 1981 or by food standards issued pursuant to that Act, in substitution for that standard[; and]

(f) Beer that conforms to the standard prescribed by regulation 218 of those regulations, or any other standard that may be set, by regulations made under the Food Act 1981 or by food standards issued under that Act, in substitution for that standard.]]

[40] When one examines the Food Regulations 1984, and in particular the individual sections referred to above, it is apparent that a detailed set of standards have been created. They form a segment of Part II of the Regulations, which is itself entitled “Standards and Particular Labelling Requirements”. Standards for a wide range of foods are set out in considerable detail. The subsection of interest is labelled “Alcoholic Drinks”. Its range and specificity may be extracted in part from the Regulation headings:

• 217 – Low-Strength Fermented Drink;

218 – Beer;
219 – Wine;
220 – Sparkling Wine;
221 – Dessert Wine;
222 – Wine-Based Drink;
223 – Wine Cocktail, Vermouth, or Wine Aperitif;
224 – Wine Liqueur;
225 – Labelling of Wine and Wine Products;
226 – Fruit Wine, Vegetable Wine and Mead;
227 – Sparkling Fruit Wine and Sparkling Vegetable Wine;

• 228 – Fortified Fruit Wine and Fortified Vegetable Wine;
  • 229 – Flavoured Fruit Wine, Flavoured Vegetable Wine, Fruit Wine Cocktail, Vegetable Wine Cocktail, Aperitif Fruit Wine, and Aperitif Vegetable Wine;

230 – Fruit Wine Liqueur and Vegetable Wine Liqueur;
231 – Labelling of Fruit Wine and Vegetable Wine and their Products;
232 – Combined Fruit and Vegetable Wine;
233 – Spirits;
234 – Liqueurs;
235 – General Alcoholic Drinks;
236 – Labelling of Alcoholic Drinks.

[41] These detailed standards have been created by Regulation authorised under s.42 of the Food Act 1981. Section 42(1)A provides that regulations may be made for:

“Prescribing standards of composition, including standards of strength, weight, microbiological quality and content, quality, purity or quantity for any food and for anything contained in or added to or intended to be contained or added to any food.”

[42] Other regulations may be made under that section for the purposes of:

“Prohibiting, regulating, restricting, or imposing conditions in respect of, the importation, preparation, processing, manufacturing, packing, storage, carriage, delivery, or sale or any food.”

[43] For the purposes of the Act, “food” includes any drink – including the drinks for which standards are created in Regulations 219 – 232 inclusive.
[44] It is worth noting that the Food Act goes on to create a series of offences in relation to food. See for example s.9(1) and (4) and s.10.
[45] Hence the food regime includes careful and detailed standards for a wide range of foods, including drinks, with penal provisions relating to sales and marketing of those products, with a focus on the protection of consumer interests, notably health.
[46] The focus of the Sale of Liquor Act is considerably different. What s.37(3) does is select, from the seventeen standards for different alcoholic drinks created by the Food Regulations 1984, four of which Parliament has deemed could be sold from licensed supermarkets and grocery stores.
[47] A legislative amendment to permit supermarkets to sell liquor was a considerable change over the previous statutory provisions. Indeed, s.37(3)(a) as originally passed limited sales by supermarkets simply to wine, including sparkling wine but not beer. That was added by a later broadening amendment of s.37(3). It was the Food Amendment Act in 1996, which by consequential amendments to the Sale of Liquor Act added fruit wine, sparkling fruit wine and mead to s.37(3). It was the Sale of Liquor Amendment Act of 1999 which added beer to that provision.
[48] Therefore, it can be seen that the nature of liquor able to be sold from supermarkets and grocery stores has been consistently and legitimately constrained. It is clearly not the case, for example, that Parliament intended such an off-licence to permit the sale of dessert wine (Regulation 221), or fortified fruit wine and fortified vegetable wine (Regulation 228). Similarly, such licences do not extend to spirits of any sort (Regulation 233).
[49] When making the selection of those four regulations in s.37(3) of the Sale of Liquor Act, Parliament has anticipated that the Standards of the 1984 Regulations may change. The section provides that the off-licence will apply to wine (and the other products) as they are defined currently in the 1984 Standards by other Standards that may be set by regulation pursuant to the Food Act, or by food standards issued under that Act, “in substitution for that Standard” [Emphasis added].
[50] In December 2002, pursuant to her authority under s.11(C) of the Food Act, the Minister promulgated new Standards.
[51] Section 11(C) provides that the Minister may issue food standards for the purposes of, or in relation to, all or any of the following:

“[a] Food safety;

[b] The composition of food ... see the production, manufacture and preparation of food;

...

[i] The sale of food;
...
[k] Food safety programmes;
...
[m] Such other matters relating to food as may affect public health.”

[52] The new food Standards promulgated in December 2002 result from an extended process of co-operation and harmonisation with Australia. That process resulted in the formation of the body known as Food Standards Australia and New Zealand (formerly ANZFA). Its mission is:

“To protect, in collaboration with others, the health and safety of people in Australia and New Zealand through the maintenance of safe food supply.”

[53] The Foods Standard Code has been developed, with Standards on a wide range of foods, similar to the previous regulations, and including Standards in relation to liquor.
[54] Under s.11(O), “contraventions” or “breaches” of the Standards are offences in the same way that contraventions of the regulations were. Conditions on the sale of liquor, are however, not dealt with.
[55] When considering the Standard for wine and wine products (Standard 2.7.4) one is struck immediately by the considerably different style and content of these Standards from the previous regulations. The Standard itself says that its purpose is to set “General definitions for wine and wine product and provides permission for the addition of certain foods during the production of wine.” This is different from the rather more precise definitions of products contained in the regulations. Wine is defined in that Standard as:

“The product of the complete or partial fermentation of fresh grapes, or a mixture of that product and products derived solely from grapes.”
The Standard goes on to define “wine product”.

[56] Regulation 219 definition of “wine” was somewhat similar:

“Wine shall be the product of a partial or complete alcoholic fermentation of any of the following:

(a) Grape juice;
(b) Grape juice and other portions of grapes;

• (c) The reconstituted product of concentrated grape juice and drinking water.”

[57] What has gone from the Standard, to places elsewhere in the Standards, are provisions that used to occur in the Regulations providing for labelling, permitted additives, filing and stabilising agents, propellants, preservatives, sweeteners and back-blending agents. Also missing is a limited level of dilution and, most significantly, a limitation that wine shall not have an alcohol content of greater than 15% by volume.
[58] Because of these differences, it is apparent that the new Standards are differently designed, and more in keeping with the new Trans-Tasman Food Safety Policy, than providing definitions of continuing use under the Sale of Liquor Act.
[59] However, were the Standards to be accepted as being in substitution for the Regulations, one would have to consider whether the Asian wines sought to be sold fall within the definition of wine just provided.
[60] As the Asian wine contains quantities of salt, products clearly not derived solely from grapes, they are neither the product of the complete or partial fermentation of fresh grapes, or a mixture of that product and products derived solely from grapes. They are accordingly, not “wine” for the purposes of s.37(3).
[61] As noted above, Standard 2.7.4 also provides a definition of a “wine” product. This means:

“Food containing no less than 700 ml/L of wine as defined in this Standard, which has been formulated, processed, modified or mixed with other foods such that it is not wine.”

Accordingly, it may be that Asian wines constitute a “wine product”. That is, on the assumption, that salt is defined as a “food”, the Asian wines might constitute a wine product.

[62] However, this is of no benefit to the applicant, as an off-licence is restricted to sales of “wine” which conforms to the Standard. It does not include “wine product” or any other product defined at the same time, and in the same standard as wine, if it is not wine.
[63] Turning now to consideration of Standard 2.7.3, we note this applies to fruit wine and vegetable wine. Under this Standard:

“... Fruit wine and/or vegetable wine means the product prepared from the complete or partial fermentation of fruit, vegetable, grains and/or cereals or preparations of those foods, other than that produced solely from grapes.”

[64] Section 37(3)(c) permits the sale from off-licences of fruit wine which conforms to the Standard prescribed in Regulation 226. The definition of fruit wine in Regulation 226 is as follows:

“Fruit wine shall be the product of the alcoholic fermentation of the juice or of the juice and other portions, of any fruit other than grapes.”

[65] The Standard which has been substituted for the relevant portion of Regulation 226 in Standard 2.7.3 can only be that portion of the definition of fruit wine that relates to fruit wine. Accordingly, that portion of the definition which has been substituted is:

“The product prepared from the complete or partial fermentation of fruit, or preparations of fruit, other than that produced solely from grapes.”

[66] There seems to be no justification under the rules of ordinary English or statutory interpretation to treat that part of the definition which relates to vegetable wine as being in substitution of a definition of fruit wine. This is particularly relevant to Asian wines which are made from the fermentation of grain. We note in passing, that there does not appear to be a definition of “sparkling wine” or “sparkling fruit wine” in the new Standards, and that raises the question whether they are intended to be “in substitution” for the previous Standards.
[67] Accordingly, on analysis the submissions on behalf of the licensee are incomplete. In paragraph 3 counsel asserts that the licensee is entitled to sell wines “as defined in the new Food Code and Standards.” But, the new Standard for wine is not complied with. Counsel has also submitted that “a fruit wine may include a wine made from cereal or rice.”
[68] While the Standard is arguably clear about the definition of “fruit wine” and “vegetable wine”, it may not be clear as to where wine made from grains or cereals fall.
[69] In those circumstances, the legislative intent of s.37(3) can be referred to for assistance. As can be seen, the range of liquors able to be sold by supermarkets and grocery stores has been deliberately limited. Absent any justification for extending it, where a choice of interpretation favours a number of options, it would seem more appropriate to choose that definition which most closely substitutes for the definition in Regulation 226. As can be seen, Regulation 226 provided definitions of both fruit wine and vegetable wine, with only fruit wine selected for sale in supermarkets or grocery stores.
[70] Even if that were wrong, and counsel were correct – that the definition of fruit wine now does, and should, include wines made from cereal or rice, it is not clear that salt is a permitted food additive. Salt is not included as one of the items that fruit wine or vegetable wine may contain, but could be additives or permitted processing aids. As counsel points out, those are contained in Standards 1.1.3 and 1.3.3. Extracts provided include a range of chemical compounds but no salts (and in particular no table salt –sodium chloride).
[71] Accordingly, unless there is any evidence that the previous definition of fruit wine is held to include wine made from grains or cereals, there would seem no justification for now extending the definition to include previously prohibited products.
[72] A further matter of note is that the Food Regulations have continued to be made under the Food Act 1981; (see 2002/396). Those regulations continue to contain definitions of wine, fruit wine, sparkling wine and sparkling fruit wine.
[73] “Wine”, under these Regulations means:

“... The product of the partial or complete alcoholic fermentation of any or all of the following:

(a) Grape juice;
(b) Grape juice and other portions of grapes;
(c) The reconstituted product of concentrated grape juice and water.”
[74] This definition is virtually identical with the wine definition portion in former Regulation 219:

“Wine shall be the product of the partial or complete alcoholic fermentation of any of the following:

(a) Grape juice;
(b) Grape juice and any other portions of grapes;
(c) The reconstituted product of concentrated grape juice and drinking water.”
[75] The definition of “fruit wine” in the Food Safety Regulations 2002 is as follows:

“... The product of the alcoholic fermentation of the juice, or of the juice and other portions, of any fruit except grapes.”

It will be recalled that the definition from Regulation 226 is as follows:

“Fruit wine shall be the product of the alcoholic fermentation of the juice, or of the juice and other portions, of any fruit other than grapes.”

[76] It can be seen that these definitions are much closer than those in the Standards to those contained in the previous Food Regulations.
[77] Returning to the definition in s.37(3)(a), and the point is the same in relation to the other sub-paragraphs, the definition of wine that is to be used is to come from either the Standard provided in the Food Regulations 1984, or:

“[i] Any other Standard that may be set by regulation made pursuant to the Food Act 1981, or

[ii] By food standards issued pursuant to that Act in substitution for that standard.”

[78] Accordingly, it appears that there is a choice of definition available in interpreting s.37(3). That is, either a Regulation or a Standard, provided they are issued in substitution for the 1984 Regulations.
[79] Where there are differences between Standards and Regulations, that choice is governed by the words “in substitution for that Standard”. We consider that the Authority is required to use that Standard or Regulation which most closely substitutes for “that Standard”, that is, the Standard prescribed in the Food Regulations 1984.
[80] It appears that the relevant portions of the Food (Safety) Regulations 2002 more closely resemble Regulations 219, 220, 226 and 227 than the Food Standards Code.
[81] This is not altogether surprising or unexpected, given the different policy intent behind the Food Standards Code. Further support for the proposition that the Food Safety Regulations 2002 more closely substitute for the previous Regulations can be found in Regulation 20. Regulation 20(2) reads as follows:

“Wine, sparkling wine, fruit wine, sparkling fruit wine, and mead that are sold in an off-licence must not contain more than 15% alcohol by volume at 20ºC.”

[82] Insertion of these definitions in new Food Regulations, and this latter one in particular, indicates a legislative intent to maintain the link between definitions in the Food Safety Regulations, and their use under the Sale of Liquor Act.
[83] Finally, in the explanatory note, which is not part of the Regulations, but is helpful in determining whether to use the Regulations or the Food Standards Code, is the statement:

“The remainder of the Food Regulations 1984 that are not specifically dealt with in these regulations are provided for in the Food Standards Code.”

As the matters necessary for determination under the Sale of Liquor Act are contained in these regulations, there seems no need to go on to consider the Food Standards Code for this purpose.

Conclusion

[84] If the Food Standards Code is referred to, its definitions do not support the sale of Asian wines.
[85] However, rather than turning to the Food Standards Code, the Food Safety Regulations 2002 continue the previous regulatory history, and make provisions that are more closely “in substitution” for the previous regulations, and should be adopted. Once adopted, those definitions do not permit an extension of the range of goods available to be sold by off-licences. If granted an off-licence the applicant may not sell any Asian wines, nor any wine made from grains or cereals.
[86] We have considered the Police evidence that the applicant had advertised and sold liquor without a licence. That evidence was not seriously challenged by the applicant other than to plead ignorance of the law on behalf of the manager, and a failure by the other more experienced directors of the Tai Ping Trading Company Limited to monitor the new directors and its subsidiary company.

[87] The penalties under ss.151 and 152 for selling liquor without a licence and allowing unlicensed premises to be so used are significant. Selling liquor without a licence is a breach of the underlying principle of the Act. However, we note that those matters were not subject to a prosecution in the District Court, the Police preferring instead to deal with those matters by opposing the application.

[88] We note also that the Tai Ping Trading Company Limited and its other subsidiary companies, have not incurred breaches of the Sale of Liquor Act, nor have they previously been the subject of an adverse report from the Police or the Inspector. We note also that there has been a long delay in resolving this application, mainly brought about by the difficulty in interpreting the Food Act 1981 and its Regulations. The applicant has therefore had to wait some considerable time for the issue to be resolved. In the circumstances we consider that delay is sufficient penalty.

[89] We are satisfied that the applicant is suitable, and we grant the applicant an off-licence to sell and deliver liquor on or from the premises, to any person for consumption off the premises.
[90] The hours will be as follows:

Monday to Saturday 9.00 am to 7.00 pm.

[91] A copy of the licence setting out the conditions to which the licence is subject is attached to the decision.
[92] The licence will not issue until:

(a) The expiry of 20 working days from the date of this decision. That period is the time provided by s.140 of the Act for the lodging of a notice of appeal.

(b) All relevant clearances have been obtained. The applicant is not entitled to sell liquor until the licence issues.

[93] The applicant’s attention is drawn to s.48 of the Act obliging the holder of an on-licence to display:

(a) A sign attached to the exterior of the premises so as to be easily read by persons outside each principal entrance, stating the ordinary hours of business during which the premises will be open for the sale of liquor, and

(b) A copy of the licence, and the conditions of the licence, attached to the interior of the premises so as to be easily read by persons entering through the principal entrance.

DATED at WELLINGTON this 27th day of November 2003

Judge E W Unwin Mr J C Crookston
Chairman Member

taiping.doc(aw)