Queens Wharf Brewery shows the hidden pain of lockout laws, AHA says

HISTORY: The Queens Wharf Brewery, shown here in 2005, has been poured into the debate over the city's liquor laws and their impact.
HISTORY: The Queens Wharf Brewery, shown here in 2005, has been poured into the debate over the city's liquor laws and their impact.

CHANGING pub ownership in Newcastle’s lockout zone has hidden the true impact of the laws on the commercial side of inner city nightlife, the Australian Hotels Association contends. 

The pub lobby’s second submission to the review of lockout laws argues the number of pubs remaining open under the restrictions has been a misleading measurement of the laws’ impact. 

“The commercial reality is when trading is impacted and hotels lose their value, financial institutions call in loans, often forcing licensees to sell at lesser prices to pay their debts,” the submission said. 

It illustrates the argument with the example of a city hotel allegedly bought for $6.8 million in 2008 and boasting a $10 million annual turnover.

“By 2013 the hotel was in receivership, sold for $2.4 million with a turnover of $6 million annually,” the submission said. 

“The cost to the licensee was immense, but the hotel itself trades on under different ownership so the perception is nothing has changed.”

Details in the case study, including the fact former restaurant Nor’West won an AHA award in 2009, indicate it refers to the Queens Wharf Brewery. 

Former licensee Michael Hogg’s tenure running the venue ended when it went into receivership in 2013. Reports in 2008 pegged his original purchase price at around $8 million. 

FORMER LICENSEE: Michael Hogg at the Queens Wharf Brewery in 2009.

FORMER LICENSEE: Michael Hogg at the Queens Wharf Brewery in 2009.

Receiver McGrathNicol’s case study on the 2013 sale pegged its turnover at the time as between $7 million and $8 million with debts of $5.2 million. 

Mr Hogg on Tuesday declined to comment on his time in the city’s hotel industry, saying it was “not an enjoyable expierence” and in his past, but in 2013 he told the Herald he had invested to comply with law changes that ultimately caused a decline in patrons. 

‘‘I think what happened was that younger people just thought ‘Newcastle is too hard, let’s look for other options’, and they stayed in suburban hotels or hit Sydney – there’s been a lot of leakage,’’ the Herald reported.

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The AHA’s first submission led to the review of the laws for the 14 venues under the special conditions, which will be conducted by barrister Jonathan Horton QC. 

“The conditions have been in place for nine years and Newcastle’s CBD has changed considerably in this time,” Liquor and Gaming NSW’s website for the review notes. 

In its latest submission the AHA argues that one in four hospitality workers at the city’s 14 restricted pubs had been laid off by 2010. 

Sales revenue was down 30.8 per cent at the same point, compared to a statewide rise of 2.7 per cent in the sector, and $22.5 million had been wiped off the value of the Newcastle assets.

The document also draws on data purporting to show Newcastle’s assault rates rose 21 per cent between 2009 and 2011 after the laws came into force. 

It argues the lockout model is a “blunt policy instrument” in areas like Newcastle and Kings Cross.

“While we are not advocating for the complete removal of lockouts or cease service provisions as a part of this review, we remain convinced imposed lockouts are not an effective strategy, and the detrimental consequences to business substantially outweigh any perceived benefits,” it said. 

Submissions to the lockout law review closed last week.

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