Australian Hotels Association (NT Branch) Submission in response to: City of Darwin s Draft Street Food Policy 21 August 2015
Contents 1. About the AHA (NT)... 1 2. Executive Summary... 1 3. Popularity of Food Trucks... 1 4. Local Restaurants... 2 4.1 Employment for Territorians... 3 4.2 Regulation and Red Tape for Restaurants... 3 4.3 Rent, Rates and Fees... 4 4.4 Food Hygiene and Safety Standards... 4 5. Feedback on the Council s Food Van Fridays in Civic Park... 5 6. Draft Street Food Policy... 5 7. Closing Remarks... 6 8. Contact... 6 i
1. About the AHA (NT) The Australian Hotels Association (NT Branch) is the peak employer representative for the Territory s hospitality industry. The AHA (NT) is comprised of five divisions; Accommodation Division, ClubsNT, Hotel Division, Wayside Inn Division and a Restaurant Division. We currently represent over 160 businesses located throughout the Territory, across all five divisions. Over 40% of AHA (NT) Members operate within the City of Darwin s municipality, which makes the Council s policies extremely relevant to our Association. 2. Executive Summary The AHA (NT) and our Members, particularly restaurants are growing increasingly concerned with the proliferation of pop-up food vendors and bars and the impact it is having on permanent and commercial local businesses. As you may be aware, the AHA (NT) was supportive of the City of Darwin s position on prohibiting pop-up bars in public spaces and places where the primary purpose is the sale and supply of alcohol. The AHA (NT) does not support the City of Darwin ( the Council ) Street Food Policy, as it does not acknowledge or support existing and permanent bricks and mortar restaurants. In addition to the lack of support from Council to local commercial businesses, the AHA (NT) also has concerns regarding the level of food safety, hygiene, health standards, amenities, and impact on local neighbourhoods from mobile food vendors. The AHA (NT) and our Members are very supportive of the Council s objective to revitalise sections of Darwin, in particular Darwin CBD. The AHA (NT) and our Members are keen to work with you on projects and events that increase vibrancy and appeal to Darwin s climate and lifestyle, through the use of bricks and mortar businesses and existing infrastructure. However, the AHA (NT) believes there are currently enough opportunities for creative and innovative food trucks or pop-up restaurants to operate within existing markets (Mindil, Parap, Palmerston, Nightcliff, Rapid Creek) and events, (Darwin Festival, V8s, Bass in the Grass, Greek Glenti, Italian Festival etc). The AHA (NT) is seeking support from the Council to create a sustainable hospitality industry, which provides confidence and opportunities for local businesses to invest in our economy. 3. Popularity of Food Trucks While there is no doubt the popularity of food trucks or pop-up street food has risen dramatically over the past few years, the longevity of this popularity is questionable, given the temporary nature of pop up restaurants and food trucks. The AHA (NT) believes that the Council should always consider the impact on local businesses before adopting foreign policies. 1
The population of the City of Darwin is well under 100,000 (2011 Census stated 73,000). The population in capital cities such as Melbourne and Sydney are approximately 4.087 and 4.293 million respectively. The large population of these two capital cities seems to facilitate food trucks co-existing with permanent bricks and mortar hospitality businesses. However, the Council should be aware that even in these two large cities, with millions of people, there were reports that local bricks and mortar businesses were negatively impacted by food trucks located nearby. In addition to this, there were also reports of the following issues occurring as a result of food trucks operating in Sydney; lack of waste disposal, lack of amenities and toilets, inability to control anti-social behaviour, noise complaints by nearby residents and lack of parking and traffic congestion. The AHA (NT) has received anecdotal evidence that some of these same issues are occurring in Rapid Creek, where a pop-up restaurant is operating, in terms of noise complaints by nearby residents, lack of parking, traffic congestion, lack of waste disposal and toilet amenities and poor lighting. The Sydney Council conducted a review of their food truck trial in October 2013, which indicated that 42% of people would have eaten at a local restaurant or eatery, but instead ate a food truck. There was also mixed results from the Sydney community on how much food trucks activated spaces during the trial. The same percentage of people choosing to dine at a food truck instead of a local restaurant in Darwin would have a devastating effect on local hospitality businesses, many of which are small family run businesses operating on low profit margins. 4. Local Restaurants The Council should be aware that local restaurants in Darwin are currently doing it tough, with high operational costs, low trading during the week and weekend numbers steady but not anywhere near close to full capacity. There is genuine concern from the hospitality sector that a proliferation of food trucks or pop-up restaurants will cause commercial hardship for local operators. Aligned with the increase in popularity of food trucks, there has also been a rise in the community s expectations of restaurants and their culinary experience. Customers of restaurants, including those in the Darwin area, are becoming more discerning, with a restaurant serving quality food no longer good enough. These new expectations from customers have seen a natural attrition of local restaurants and cafes close down and exciting new and innovative venues opening up. Restaurateurs and café owners are now spending more than ever in creating culturally enriching interiors and experiences in their restaurant in order to attract and retain customers. This type of private sector investment in Darwin s permanent hospitality infrastructure and lifestyle choices should be strongly encouraged and promoted by the Council, because it creates sustainable vibrancy and can invigorate areas of our city. 2
4.1 Employment for Territorians Unlike pop-up restaurants and food trucks, local restaurants can not cherry pick the dates and times they operate. Restaurants operate all year round, with most trading 7 days a week in order to operate commercially profitable businesses and meet customer s expectations. Staff wages and training are a big expense for local restaurants, with owners and managers heavily invested in providing a high level of customer service in order to attract and retain customers. The AHA (NT) and our Members are committed to growing our industry and building the capability and performance of hospitality staff. A proliferation of food trucks or pop-up restaurants threatens the commercial viability of local restaurants, which has the potential to impact on the number of people employed our industry. 4.2 Regulation and Red Tape for Restaurants Local restaurants are subjected to a high degree of regulation, in terms of liquor licensing, food and safety standards, as well as complying with all the relevant Council policies. On the other hand, Council approved food trucks or pop-up restaurants have a low level of regulation they must comply with, which creates disparity and an unfair playing field. An example of the high degree of regulation that local restaurants must comply with is the Council s Outdoor Dining Policy. If a commercial business wishes to use Council s footpath for outdoor dining in order to take advantage of Darwin s weather and to increase vibrancy of their restaurant they must: - pay the council the annual rental value at the market value of the land; - provide dimension drawings in order to get approval for the position of the tables and street furniture in relation to any existing features such as planter boxes, as well as the size of the proposed Alfresco Area; - take out public liability insurance; - ensure the area is kept clean and disposal of waste is carried out; - ensure adequate and accessible toilet facilities; - restrictions on the provision of entertainment; - ensure access and clearance for people with disabilities; and - ensure that 1800mm is provided between the kerb and the outdoor dining chairs and tables in order to allow two wheelchairs to pass through. In contrast, the Council s Street Food does not require food trucks and pop-up restaurants to obtain approval for the furniture they choose or provide basic access to amenities (e.g. toilets). There are no requirements to ensure appropriate access for people with disabilities, safe surfaces or any other health and safety requirements. If the Council is serious about revitalising or activating spaces and providing opportunities for the community to take advantage of Darwin s weather and outdoor lifestyle, the AHA (NT) is seeking an urgent review of the Council s Outdoor Dining Policy in order to reduce the red tape involved with restaurants seeking to apply for outdoor dining. 3
4.3 Rent, Rates and Fees Local hospitality businesses pay the market rate for use of Council land for their businesses operation, e.g. outdoor dining areas. In addition to this, local businesses also have to pay their annual Council rates, which for a small restaurant can be $10,000 per year. One of the biggest expense items for local restaurants is their rent. The current market rate for commercial restaurant spaces in Darwin CBD to lease are: Medium size restaurant (266 square metres) = $156,000 per year (not including power and water) Larger scale restaurant (363 square metres) = $360,000 per year (not including power and water) In contrast, the fees which the Council is proposing to charge street food vendor for their permits is $272 per month or $3,314 per year, which includes the provision of power and water. This type of discrepancy in the fees and services provided to short term pop-up operators in contrast to the rates, rents and fees paid annually by local hospitality businesses is inequitable. This discrepancy in rent, rates and fees provides food trucks with the commercial advantaged of pricing their food at reduced costs in comparison to commercial businesses. One of the reasons that food trucks and pop-up restaurants are popular is because of the low price of food. Council should be committed to supporting and promoting permanent local businesses and not creating unfair and competing business opportunities. 4.4 Food Hygiene and Safety Standards Although the Council notes in your Street Vendor Policy the requirement for permit holders to trade in accordance to NT Food Act, given the nature of pop up food vendors, the AHA (NT) does not believe that the level of auditing that occurs by the Department of Health Inspectors in bricks and mortar restaurants would be at the same level for pop-up food vendors. For instance, the premises and hygiene component of the Australian Food Safety Assessment that the Department of Health utilises, includes provisions for adequate hand washing facilitates, control of animals and pests, adequate water supply, adequate lighting, adequate toilet facilities and temperature control of food. The AHA (NT) does not believe the current or previous set-up or operation of Darwin pop-up food trucks/vendors would satisfy all of these requirements. Furthermore, given its pop-up nature and the schedule of visits conducted by the Department of Health Inspectors, the AHA (NT) questions if Inspectors would get sufficient time to audit street food vendors prior to them packing up and leaving a site or leaving the Territory. Again this is in contrast to bricks and mortar restaurants that operate all year around, and that receive regular visits by Health Inspectors. 4
5. Feedback on the Council s Food Van Fridays in Civic Park The Council conducted a trial of Food Van Fridays from 22 May to 10 July with four vendors at Civic Park in Darwin city. From the outset of this trial there was concern from nearby hospitality operators that Food Van Fridays would draw customers away from their establishments on one of the most important nights they rely on for steady trade. As a consequence the AHA (NT) and our Members did not support this trial. For most restaurants Friday and Saturday nights trading helps to cover their high operating costs and to cover for the slow mid week trade. As a result, any impact on the number of people eating in restaurants on Friday nights has the potential to harm the overall operations of a restaurant. As it currently stands, local restaurants experience a 50% reduction in trade on Thursday nights when Mindil Beach Markets commence each year. There may have been more support from local restaurants to have food vans in Civic Park on Monday, Tuesday or Wednesday nights, in order to attract people into the area when it is extremely quiet and restaurants aren t relying on these nights trade to sustain their overall operations. The four food vendors selected by Council to operate in Food Van Friday trial could be described as small scale, alternative vendors, offering only vegetarian and dessert dining options. As a result of the vendors selected by Council to operate during this trial the impact to local restaurants was minimal. However, if Council had selected more mainstream or professional food trucks that have the capacity to deliver 300 plus meals, then the impact on local restaurants would have been far greater. The success story of this trial would have been the operation of Brown s Mart s live music and bar which was run concurrently and in close proximity to the Food Vans Friday trial. Without knowing their exact sales, anecdotal evidence suggests that the venue was substantially busier over the eight week trial than their normal trading. Given the Council is an owner and major partner of Brown s Mart, the AHA (NT) understands your motivation to ensure the venue s events are successful. However, the AHA (NT) is concerned whereby Council is using local government property to maximise a return, and proving commercial discounts for food trucks to operate. These commercial discounts are in direct competition with non-government commercial business that are unable to access any discounts to their on-going operational costs. 6. Draft Street Food Policy The AHA (NT) seeks the inclusion of the following policy objective into the Council s Street Food Policy : Existing Businesses Council supports restaurateurs currently operating or wishing to operate from commercial premises within the City of Darwin and seeks to ensure street food vendors do not comprise the operation of these businesses. 5
Furthermore, the AHA (NT) seeks the inclusion of a Local Procurement Policy into your Street Food Policy, whereby the Council invites participation from existing businesses in a certain area to conduct food activities on Council land prior to allow other parties to tender for the permits. As stated previously, AHA (NT) and our Members are extremely motivated to work with Council on food-orientated events and festivals which encourage people to support local restaurants and experience the fantastic offerings of the Territory s hospitality industry. If the inclusions specified in this submission are not accepted by Council, then the AHA (NT) urges the Council to consider limiting the days and times that street food vendors can operate, limiting them to Monday, Tuesday and Wednesday, in order to reduce the impact on bricks and mortar restaurants peak trading days Fridays and Saturdays. Alternatively, the Council should limit the use of permits for street food operators to occur when the population supports it, for instance during major events and festivals. 7. Closing Remarks As stated earlier, the AHA (NT) supports the Council s policy intention of activating public spaces and places, but does not believe that street food vendors are the necessary solution, given its potential to impact on our Members who are local permanent commercial businesses. The AHA (NT) is concerned that a proliferation of street food vendors will see a reduction in the number of restaurants operating and a reduction in future investment in the hospitality industry. We are concerned with the lack of employment and training opportunities that pop-up restaurants and food trucks provides. As the policy currently stands, there is a lack of procurement fairness offered to commercial businesses, in comparison to pop-up food trucks. There is genuine concern from local restaurants of the negative impact to their business if Council proceeds with its Street Vendor Policy in its current form. There are many innovative ways to activate public spaces and places, through arts, crafts, sports, community activities, entertainment, festivals and events that involve and support local businesses and existing infrastructure. The AHA (NT) and our Members are keen to discuss event and festival ideas that involve existing hospitality businesses in greater detail at a time convenient to you. 8. Contact For more information, please contact: Des Crowe Chief Executive Officer Australia Hotels Association (NT Branch) des@ahant.com.au Ph: 8981 3650 6