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Small bars industry too “fragile” to expand yet: Haese

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Lord Mayor Martin Haese insists he’s “not a protectionist”, but he still argues that expanding small bars into the suburbs too soon would jeopardise the city’s “fragile” industry.

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Small bars spreading?

The former YouthWorks fashion retail magnate told the audience at a Property Council debate at Pirie & Co bar last night that there had not been enough time for operators of the 69 small bars that had opened in the CBD, since the Small Venue Licence was introduced there three years ago, to see a return on investment.

“Three years isn’t enough for a small bar to pay their debts,” Haese said

“I’m not a protectionist at all – but this is so important to Adelaide’s brand.

“I think it deserves special consideration.”

Haese said the licensing scheme, credited with the “renaissance” of vibrancy in Adelaide, should eventually be expanded to jurisdictions – but not yet.

“It’s not about protectionism,” he said.

“Let’s just let them establish some solid legs.

“We don’t want to do anything that would jeopardise it [the industry]. It’s not a question of ‘yes’ or ‘no’ – it’s a question of ‘when’.”

But Haese would not say when he believed the licences should be opened to the rest of the state, instead suggesting a report into the health of the small bars industry should be commissioned to find out if it’s ready for the expansion.

Prospect Mayor David O’Loughlin and City of Holdfast Bay Jetty Road development manager Linda Johnson told the audience their council areas had untapped markets for small bars, and the State Government should “share the love”.

O’Loughlin rejected fears the city’s small bars industry would suffer if other areas were allowed to open similar venues.

The fear about it affecting the city is overstated,” he said.

“There won’t be a plethora of [small bars in the suburbs].

“If there’s no demand they will fail. That’s what happens with … every other [business].”

However, he said, “if there is one, or two, or three, it will have a transformative effect”.

“There isn’t a good reason not to answer what the market wants.

“When someone says, ‘I’m not a protectionist, but…’ I think we know what that means.”

He said there would be the “same tired arguments” about new businesses having not yet seen a return on investment when there are “20 more” in the CBD.

But small bar operator Josh Baker told the audience: “The small venue licence has been amazing for the CBD [but] should it grow out of the CBD? I’m not sure.

“If we carry it further we’re going to see … businesses struggle.

“To keep these businesses sustainable we’re going to have to see population growth.”

Baker suggested there was enough flexibility in current licensing arrangements that an entrepreneur with the right “case management” should be able to succeed without the small bar licence.

However, O’Loughlin argued that no other industry was more protected from competition in South Australia than the liquor industry. He said both small bars in the CBD and “lazy pubs” in the suburbs were being shielded from competition because of the city monopoly on the Small Bar Licence.

“In the suburbs, we have got … a whole lot of lazy pubs, filled with poker machines,” he said.

Under current licensing arrangements, O’Loughlin said, “I can have a beer with my haircut, but I can’t have a beer with my mates [in a small bar] on Prospect Road”.

“The pilot is done. It [the small-bar business model] has been proven.

“How long can we justify this protectionism?”

Former Supreme Court Judge Tim Anderson’s liquor licensing review, released last month, argued that the Small Venue Licence should be expanded, but only to North Adelaide.

Johnson argued that Glenelg, not North Adelaide, was the next logical step for the small, as it had a 25 to 45-year-old, predominantly female demographic, which was not being catered for by current options at the Bay.

“We have no offering for the demographic,” she said.

Johnson said many in her council area would rather go to a local bar of the quality seen in city small bars since. But she also insisted Glenelg posed no threat to city bar operators.

“We actually have low, very low vacancy rates… that’s two of three venues.”

“I think it’s time to share the love.”

The Adelaide City Council last month endorsed the recommendation to expand the Small Venues Licence to North Adelaide.

Some council members told InDaily at the time that they were reluctant to see the “competitive advantage” offered by the scheme extended to other areas.

The State Government is considering the findings of Anderson’s review.

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