Sunday 19 February 2023

Local restrictions against unpopular retailers

When the Sale and Supply of Alcohol Act 2012 came into force, it gave local councils the ability to develop local alcohol policies (LAPs), to control the availability of alcohol in their city or district. One of the things that LAPs could do was to restrict alcohol licenses from being granted for premises that were in close proximity to 'sensitive sites' (like schools, churches, alcohol treatment providers, etc.). At the time, there was a lot of talk from some advocates about creating wide exclusion zones around these sensitive sites. I pointed out (to a number of people) that these exclusion zones wouldn't have to be very big in order to create a de facto ban on alcohol licenses entirely. Sanity prevailed, and those councils that have these sorts of restrictions in their LAPs have not made them excessively large.

Fast-forward to 2023, and the same arguments for exclusion zones are being made in relation to vape stores. For example, the Asthma and Respiratory Foundation was last year calling for a ban on retailers selling vaping products within one kilometre of a school. How feasible is that sort of control?

Steve at City Beautiful did the GIS work and reported it last year. Here's their map of all of the areas where a vape shop could set up, if you exclude all areas that are within one kilometre of a school, and exclude all areas that are not zoned commercial:

The grey areas are places where a vape shop could not be placed. The orange areas are the few places where a vape shop could be placed, in a commercial zone and more than one kilometre from a school. That's right. Almost nowhere could have a vape shop. As Steve notes in his post:

Yes, only those few tiny scraps of land shown in orange are where vape shops could go. A couple of remote industrial or business areas, sometimes with only a single site available. If there’s already a different shop there? Tough luck. The only significant area where a vape shop could actually go is right at the northern end of the city centre - and rather than being a realistic idea for every single vape user in central Auckland to come downtown every time they need to stock up, it just shows more than anything else, how desperately Auckland’s city centre lacks a school!

Urban planning is hard. Regulations that seem sensible can have unintended (as well as intended!) consequences. The problem here is that commercial zones tend to be right next to schools. If you think about your neighbourhood shops, I bet that there is a school next door to them, or just around the corner from them. Restricting unpopular retailers from being near to schools is essentially the same as restricting them from operating in most of the commercial zones in the town or city. And proponents of these regulations forget the smallest towns, of the kind that have a single school, and a single block of shops, usually on the same small stretch of main road.

There are better ways to control demerit goods than to effectively ban them. License the sellers and restrict the number of licences, tax the sale of the product, impose minimum prices, have stringent age restrictions, or do some combination of all of these things. A de facto ban, masquerading as an exclusion zone that only applies around schools, is not the way.

And besides, the location of stores selling these products becomes almost irrelevant when you consider online sales and deliveries. These products can be purchased anywhere, with very little in the way of controls. The last couple of weeks I've been conducting fieldwork looking at same-day delivery of alcohol (and that's why this blog has been pretty quiet of late). It's not quite the Wild West, but it's far from ideal at the moment. More on that in a future post.

[HT: Eric Crampton at Offsetting Behaviour]

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