The price of getting it wrong
New penalty guidelines put hard numbers on licence breaches and the message is clear, says alcohol licensing lawyer Pervinder Davies...
If you’ve been in the hospitality industry long enough, you'll know that New Zealand's Alcohol Regulatory and Licensing Authority (ARLA) doesn't shy away from making examples.
With updated Penalty Guidelines now in effect for any misconduct on or after 1 July 2026, it's a good time to make sure your team knows exactly where the lines are and what crossing them costs.
What the Guidelines say
Let's start with the one that catches most operators off guard: failed Controlled Purchase Operations, where a minor is sent in to attempt a purchase. Under the new guidelines, the consequences for a first breach, admitted early, break down as follows:
On-licences and bottle stores: 3-day suspension
Supermarkets and grocery stores: 5-day suspension
Manager's Certificate – not personally involved in the sale: 4-week suspension
Manager's Certificate – personally made the sale: 8-week suspension
Read that last one again. Eight weeks. That's two months without the ability to work as a manager in a licensed premises. For someone whose career is built on that certificate, it's not just a professional setback, it can be financially devastating.
The drink-driving provisions for Manager's Certificate holders are equally sobering:
Lower alcohol level: 4-week suspension
Higher alcohol level, or refusal to provide a sample: 6-week suspension
These figures apply to first breaches where the person admits the conduct early. Where there's a history of prior breaches, evidence of liquor abuse, or clear management responsibility that wasn't exercised, penalties can, and will, be increased.
Why it matters more than people think
Penalty guidelines don't just set the price of getting caught, they signal what regulators consider serious. And if you read the ARLA framework carefully, one message comes through loud and clear: the sale or supply of alcohol to minors or intoxicated persons remains the most serious breach of the Act.
That focus is deliberate. It reflects a broader regulatory philosophy that puts harm prevention at the centre of the licensing system and it puts every manager and owner on notice that these aren't theoretical obligations. They are the job.
“In my professional experience, a lot of compliance failures are the result of undertrained staff making split-second decisions without the knowledge or confidence to do the right thing.”
The training question nobody wants to answer honestly
In my professional experience, a lot of compliance failures generally are the result of undertrained staff making split-second decisions without the knowledge or confidence to do the right thing.
A 20-year-old on their second shift, faced with a group of rowdy customers and a line stretching to the door isn't going to suddenly draw on training they never received. They're going to guess. And sometimes the guess is wrong.
This is where the gap between "we have a training policy" and "our staff actually know what to do" becomes very expensive, very fast. An 8-week manager suspension doesn't just affect the individual – it affects rostering, continuity, team morale, and in a small operation it can create a genuine operational crisis.
Effective training isn't a one-off induction tick-box. It's a living part of how your business operates. That means:
Regular refreshers, not just onboarding sessions: The Act changes, guidelines change, and staff forget. A team that was trained eighteen months ago needs to be trained again.
Scenario-based learning that puts staff in realistic situations: Reading a policy document is not the same as knowing how to handle a 17-year-old who's convincingly confident, or a regular who's had one too many and is starting to argue.
Clear escalation pathways: Staff need to know that refusing a sale is supported by management and that they won't face pushback from supervisors when they do the right thing.
Management engagement: If the people running the floor aren't modelling compliance culture, no amount of staff training will stick.
The hospitality industry is well practised at training for service – how to upsell, how to manage wait times, how to turn a table. Compliance training deserves the same investment, the same repetition, and the same seriousness. The consequences of poor service are a bad review. The consequences of poor compliance are now measured in weeks off the job.
Plan for success
If you haven't already, it's time to audit your current training programme, identify gaps, and make sure every manager and key staff member understands what's changed and what's at stake.
It's also a good time to have a frank conversation with your team about the sell/no-sell decision. Not in a fear-based way, but in a professional one. These guidelines exist because the decisions made at the point of sale have real consequences in the community. When staff understand why the rules exist, they tend to follow them more reliably than when they're simply told that they exist.
ARLA's 2026 guidelines sharpen the picture that the 2024 version established and now it's up to operators and managers to make sure their teams are ready. Because the best outcome isn't knowing what the penalty is. It's never having to find out.
The ARLA 2026 Penalty Guidelines apply to misconduct occurring on or after 1 July 2026. Penalties outlined are guidelines for first breaches admitted early and may be increased where prior history, liquor abuse, or management responsibility is a factor.
Pervinder Davies specialises in alcohol licensing law and is a director of Pervinder Davies Law in Christchurch.
pervinderdavieslaw.co.nz
