COVID-19: Calls from the hospitality industry to reduce number of restaurant licences as sector struggles

The hospitality industry is calling for caps on restaurant licences as the sector struggles under the weight of COVID-19.

It comes after the country entered COVID-19 alert level 1 overnight, while Auckland will move to level 2 on Wednesday for at least a fortnight.

Renee Coulter, who owns Coco's Cantina on Auckland's Karangahape Rd, believes a cap will help lessen competition in a post-coronavirus world.

"When new restaurants open in such close proximity to existing restaurants, it means less business for restaurants already operating, as well as an unsustainable profit margin for new owners," she told NZME.

Hospitality New Zealand spokesman Jeremy Smith told The AM Show the cap issue is worth a debate.

"It's something we've debated quite a bit," he said.

"Australia works on the basis that there's a limited number of licences, so that then gives a licence quite a bit of value - so you've got an asset that can sell.

"People that do have licences hang onto them and are far more interested in protecting that asset, so you've got more compliant bar and restaurant owners - you'll have fewer people coming into the industry."

But Auckland Chamber of Commerce chief executive Michael Barnett told NZME a cap would allow the "Government to pick winners". Smith acknowledged that argument.

"The counter-argument is freedom of trade, freedom of business, [that] it shouldn't be restricted," Smith said.

'Doing it tough'

The hospitality sector is crying out for financial aid with Auckland businesses facing another two weeks of restrictions, as vendors outside of the super city enjoy their first day at alert level 1 on Tuesday.

Smith said with the wage subsidy coming to an end, there has to be more support.

"South of the Bombays, a sigh of relief. We're really pleased to be getting back to normal.

"But my heart goes out to Auckland businesses - all that time at level 3 and then level 2, and still at level 2 where most businesses will be down between 30 and 40 percent.

"Previously we had the wage subsidy to try and help us out and make the difference, but that's not there. These guys are doing it tough.

"There's got to be some support - whether it's money directly to the business [or] an extension to the wage subsidy."

But Prime Minister Jacinda Ardern said many countries haven't allowed the hospitality sector to open at all amid COVID-19 restrictions.

Ardern. Photo credit: The AM Show

"We took a different approach - we said that we believed if people were seated, we could make this work - at level 2 I think we have. Hospitality can operate," Ardern told The AM Show on Tuesday.

"I think where it becomes problematic - the ones that are doing it tougher are very small venues."

Wellington Chamber of Commerce chief executive John Milford is urging the country to play its part so New Zealand doesn't have to re-introduce restrictions again - something that could be the final straw for some companies.

"What we really need now - is to hold it at level 1."