The Nieuwenhuysen Review was a licensing system review commissioned by the Victorian government. It was led by an economist and had broad terms of reference with a focus on deregulation. The new Liquor Control Act 1987 implemented most of the review’s recommendations, relaxing trading hours and removing many restrictions on licensees. The Act was intended to introduce a European-style drinking culture to Victoria and allowed alcohol to be served without food in Victorian restaurants and cafés.
Licensing laws in Victoria were originally very liberal and liquor outlets proliferated. In 1880 there was about one pub for every 200 adults. A Licences Reduction Board was formed in 1906 and, over the next ten years, more than 1,000 hotels were closed. With the outbreak of World War I temperance advocates pushed for earlier pub closing. As a result, 6 o’clock closing was introduced in 1916.
Broad public support for restriction on the sale of alcohol continued, with a 1918 poll finding more than 40 per cent in favour of total prohibition. Until the 1960s restaurants and entertainment venues struggled with the licensing laws, with many being prosecuted for sly grog offences. With the Melbourne Olympic Games pending, a referendum to extend drinking hours was held in 1956 but more than 60 per cent of Victorians voted to retain early closing.
Reform began in the 1960s with the granting of restaurant licenses, and the Phillips Royal Commission held in 1963 led to the introduction of 10pm closing in 1966. However, restaurants were not permitted to serve alcohol except with food and bar licenses were restricted to hotels, which were still required to provide accommodation.
The Liquor Control Act 1987 was the result of an investigation chaired by Professor John Nieuwenhuysen. Not only did it remove the requirement to provide food with alcoholic drinks, it substantially reduced the cost of liquor licences. This made it viable to establish small bars of the kind that have since proliferated in Melbourne’s famous lane-ways.