Frequently asked questions
What are The Trusts?
West Auckland has two licensing trusts: Waitakere Licensing Trust and Portage Licensing Trust. They operate together as ‘The Trusts’ and have 26 bottle stores, 8 bars and one hotel. Established in 1972, the licensing trusts hold a monopoly over bottle shops and pubs/taverns in their districts which extend from Avondale/Blockhouse Bay through to the fringes of Kumeu/Riverhead.
Why do The Trusts have a monopoly?
From the early 1900’s through to the early 1970’s, West Auckland was a no-license (i.e. dry) area. Voters chose to go ‘wet’ in 1969, and under the laws at the time, were given the opportunity to choose between private licensees or licensing trusts. They chose licensing trusts and the Waitakere and Portage Licensing Trusts were subsequently formed. Their exclusive rights to certain types of alcohol licenses remain in place until they are removed by a competition poll.
What would competition mean for West Auckland?
Competition simply means allowing others (not just The Trusts) to hold all the different types of alcohol licenses in West Auckland.
Competition doesn’t mean ‘getting rid of’ or dissolving The Trusts. It doesn’t mean the end (or even a reduction) of community funding.
What would be the benefits of competition for West Auckland?
Competition would mean entrepreneurial locals (as well as larger companies like the supermarkets and Costco) would be able to sell alcohol in West Auckland under the same rules enforced across New Zealand.
Residents would be able to buy beer and wine locally at their supermarket, or from a bottle store not operated by The Trusts. Prices in West Auckland wouldn’t be higher than elsewhere any more.
There would be a more local bars/eateries, providing greater range of choices for keeping it local when going out for a drink and/or a meal.
Competition would bring more colour and vibrancy to West Auckland as well as more local jobs and investment.
How can we remove the monopoly and allow competition in West Auckland?
The public can choose to remove the monopoly via a competition poll (i.e. a referendum). A poll can be triggered by a petition signed by 15% of people in the area, or by the elected board resolving to conduct a poll. West Auckland’s only competition poll was held in 2003.
The Trusts’ monopoly
What is their monopoly exactly?
The Waitakere Licensing Trust and Portage Licensing Trust hold exclusive rights to off-licenses and on-licenses (for taverns and hotels) within their districts. It would be unlawful for the licensing authority to issue such a license to anyone other than the relevant trust.
The off-license monopoly is very broad, with exceptions only for manufacturing sites (e.g. breweries/wineries) and historical rights for continuous holders of ‘wine reseller’ licenses.
The on-license monopoly is narrower and only applies to venues operating as a tavern or hotel; other types of venues are able to be licensed as normal (e.g. restaurants). Unfortunately, the definition of a tavern is somewhat imprecise. More detail is available here.
Is alcohol more expensive in West Auckland because of the monopoly?
Yes. Bottle stores are more expensive than supermarkets, and West Auckland bottle stores are more expensive that stores elsewhere in Auckland.
Our analysis (over 2300 product comparisons made over a 6 month period) showed that wine was 25% more expensive, and beer/cider was 14% more expensive, at The Trusts versus Pak n Save (for identical products).
If The Trusts have a monopoly, why is Liquorland here?
Liquorland stores in West Auckland are owned and operated by The Trusts.
Liquorland is a franchised business with independent store owners operating their stores under the Liquorland banner. The Trusts have chosen to operate four of their stores as Liquorland franchises.
If The Trusts have a monopoly, how are Wine Villa / Fresh Beer / Hopscotch etc able to operate here?
The off-license monopoly has two exceptions: manufacturing sites and historical rights for stores that previously held ‘wine reseller’ licenses
There are three stores operating with wine reseller historical rights: Wine Villa Kelston, Wine Villa Te Atatu and the Countdown Wine Store in LynnMall. These stores are limited to wines and ciders (i.e. no beer/RTD’s/spirits).
There are also a small number of independent retail stores where they manufacture on-site and therefore are able to be issued with an off-license. Fresh Beer Brew Co in Te Atatu Peninsula and Henderson, Hopscotch Brewing Company in Avondale, Boric Food Market in Kumeu and Henderson Valley Wines.
Do The Trusts control alcohol licensing in West Auckland?
No. Alcohol licenses are issued by Auckland Council’s district licensing committee.
By virtue of the fact that they hold a monopoly, The Trusts affect the licensing rules in West Auckland, but they do not themselves control licensing.
Regarding the day-to-day aspects of alcohol licensing, The Trusts can object to a license application / renewal (which they haven’t done recently) and/or they can also informally raise concerns about a venue with Council’s licensing inspectorate. The Trusts have no greater legal rights in the licensing process than a member of the public.
Can we remove just part of the monopoly?
Not easily. It would require Parliament to change the legislation.
How does the monopoly affect hospitality in West Auckland?
The monopoly imposes restrictions and creates uncertainty for some hospitality operators. It precludes anyone other than The Trusts operating a tavern-licensed venue, and introduces significant risk for venues that might be considered a tavern.
Opinions will differ whether the monopoly has a minor or profound impact on what’s on offer in West Auckland but we believe the monopoly is a significant handbrake on West Auckland’s hospitality scene.
How much community funding comes from The Trusts?
Over the last 10 years (2012/13 to 2021/22), The Trusts have distributed $12.9 million to the community (including sponsorships).
- Your West Support Fund / Million Dollar Mission = $8.6 million
- Donation to Well Foundation / Special Care Baby Unit (SCBU) = $2 million
- Sponsorships = approx. $2 million
Does The Trusts’ community funding all come from the pokies?
No. There are two funding streams that people associate with The Trusts.
The Trusts Community Foundation Ltd (TTCF) is a gaming society which distributes gaming proceeds. This funding stream is entirely pokie money. TTCF distributed $8 million in 2021/22 and $119 million over the last decade. Gaming proceeds are tightly regulated and a minimum percentage (40%) must be distributed.
The Trusts also distribute ‘surplus’ profits from their own operations (bottle stores, bars, hotel as well as their investments). Licensing trust profits are not tightly regulated and trusts can choose to distribute as much (or as little) of those profits as they choose.
Until about 2016, the funding from The Trusts’ profits was minimal and it was effectively all from TTCF / the pokies. Up until 2005 (approx), the gaming & non-gaming funding streams were not separated.
Are The Trusts responsible for The Trusts Arena/Stadium?
No. The Trusts are naming rights sponsors of The Trusts Arena (Waitakere City Stadium). The sponsorship paid in 2020/21 was $55,000.
The Trusts contributed to the initial development costs of the stadium/arena through gaming grants.
“The Trusts Stadium was built at a cost of $28,017,889.00, was completed in August 2004 and officially opened by Prime Minister Helen Clark on 9th September 2004. The Trusts Stadium opened debt free. Major financial contributions and grants came from the Waitakere City Council ($12,541,000.00), The Trusts (Waitakere City and Portage Licensing Trusts ($5 million) and the ASB Charitable Trusts $4.5 million” (https://www.wcac.org.nz/history)
TTCF Ltd has continued to provide gaming grants to support The Trusts Arena.
What would competition mean for the community funding that comes from The Trusts?
That depends on how The Trusts choose to respond to a competitive environment, but we believe that competition would increase the amount of funding available.
A simple comparison of The Trusts’ asset base with the returns generated show that The Trusts consistently deliver lower returns, and less community funding, than a regular investment portfolio would.
Removing the monopoly would enable the Trusts to step away from the less profitable elements of their business (e.g. hospitality).
The Trusts’ financial position
How much profit does The Trusts make?
The Trusts average annual profit over the last 10 years is approximately $6 million (before community funding is deducted).
Is that a good amount of profit?
It’s not terrible, but considering the size of their asset base ($130 million), and the higher prices paid by West Aucklanders, it is not exactly great.
Unfortunately, The Trusts have refused to release information about the profitability of the different parts of their business, so it’s difficult to accurately assess how much of their profit is generated by their operations (retail / hospitality) versus their investments (property / shares).
Are The Trusts’ hospitality venues profitable?
That depends how you define profitable, but the simplest answer is “probably not”.
Unfortunately, The Trusts have refused to release information about the profitability of the different parts of their business, so it’s difficult to accurately assess how profitable each part has been.
How would their profit be affected by competition?
That depends on how The Trusts choose to respond to a competitive environment, but we believe that competition would not adversely affect their profitability.
A simple comparison of The Trusts’ asset base with their profits shows that The Trusts could generate more profit from a regular investment portfolio.
Removing the monopoly enables the Trusts to step away from the less profitable elements of their business (e.g. hospitality).
How much are The Trusts worth?
Our current estimate is about $130 million. More details here
What property and investments do The Trusts own?
The Trusts own (as at 31/03/2021):
- $92 million in real estate (based on Council valuations)
- $15.2 million in shares and bonds
- $16.2 million in cash
- $7 million in operating assets
The Trusts do not have any significant debt.
More details about The Trusts
How are The Trusts organised?
The Waitakere Licensing Trust and Portage Licensing Trust are separate legal entities with their own elected boards.
Together they jointly own West Auckland Trust Services Ltd (WATS Ltd), a management company that operates the business of both trusts. WATS Ltd has its own board with two directors appointed from each trust and five independent directors.
The Trusts Community Foundation Ltd (TTCF Ltd) is a legally separate organisation. However, each West Auckland trust nominates a member (must be the current or a former President) for election to the TTCF board. The TTCF board has three shareholder/directors, two from West Auckland’s trusts and one from the Mataura Licensing Trust. Warren Flaunty is currently Chair of TTCF Ltd.
How much are board members paid?
The president of each trust receives $30,000 each year. Other elected members are paid $280 for each meeting they attend (approx. two per month). Total board remuneration in 2020/21 was $168K.
In 2020/21, the WATS Ltd chair received $78K, deputy chair $60K, independent directors $45K and elected member directors $27K. Total WATS board remuneration in 2020/21 was $376K.
The amount paid to TTCF directors is not disclosed.
How much is the CEO paid?
In 2020/21 the CEO received approximately $375,000 for 10 months of employment, which is an annual salary of about $450,000.
Between 2012/13 and 2019/20, the previous CEO’s annual salary increased steadily year-on-year from $265,000 to $505,000.
What is WALTAG?
West Auckland Licensing Trusts Action Group (WALTAG) is a group of West Auckland residents who have come together to advocate for competition in the West Auckland alcohol market. You can read more about us here.
What has WALTAG achieved?
Well, the monopoly is still in force and we haven’t had the chance to vote yet, so not as much as we’d like!
WALTAG had two members elected to the licensing trust boards in the 2019 elections (Ben Goodale to the Portage Licensing Trust and Andrew Flanagan to the Waitakere Licensing Trust).
Through our advocacy and the influence of our elected members, we’d like to think we’ve helped make positive changes at The Trusts. Including:
- A changing of the guard with a new CEO and a refresh of the WATS board.
- An increase in the charitable distributions from The Trusts.
- Adoption of a living wage.
- Improved transparency e.g. WATS financial statements, CEO salary, market research.
- Bringing Liquorland to West Auckland.
- The withdrawal of misleading advertising.
You can see how effective we’ve been through the numerous media articles here.
What happened to the petition?
We launched our petition in August 2018 and submitted the signatures collected to the Waitakere Licensing Trust in October 2021. The scrutineer found that we were 934 signatures short of the 16,910 required to trigger a referendum. You can read more about it here.
Is WALTAG a front for the supermarkets?
No. WALTAG is totally independent. We do not represent commercial or party-political interests.
How can I get involved?
We’d love to have more people involved! Connect with us on social media or get in touch here.