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FUNNY OR FAIR BUSINESS?

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The current rumpus regarding an application for a business licence has raised the issue of the right of non-Niueans to operate on the island in competition with Niuean-owned businesses.

The process of starting up a business on the island is not too arduous. You make the usual application to the Licensor of Businesses i.e., the Financial Secretary or his nominee, who is obliged by law to place a public notice that a licence is being applied for and that anyone who has any objection is given a certain amount of time to make representation. If there is no objection the business is good to go; if anyone does object, the licensor must exercise his discretion on whether there are legitimate grounds for not issuing a licence.

The latest crop of applications for business licences include the usual retailing outlets and consultancy services but the one that seems to be causing something of stir is that from the owners of Namukulu Cottages who are looking at opening a cafe on site. The owners of Hio Cafe, located a stone’s throw from Namukulu Cottages, have taken to social media to express their concern and to garner support to block Namukulu Cottage’s application. Hio Cafe, a small locally owned business is citing unfair competition from what it says is a well established and successful $1.3m non-Niuean-owned tourist accommodation business. In effect Hio is saying to Namukulu Cottages, be happy with your fair share of the tourism cake.

Niue Sunset from Hio Cafe – pic credit HioCafe.

As to be expected social media has attracted the usual looney fringe but there is also a good representation of support both for and against Hio’s stance. Some are calling on government to protect Niuean businesses from the more aggressive palagi approach. Others say that government has already opened the gates by allowing Swanson supermarket to build on Crown land a substantial complex in direct competition with smaller Niuean-owned outlets. Swanson is owned by Auckland based WH Grove and Sons Ltd.

There is also a growing number of people who support non-Niueans opening up businesses but only with meaningful Niuean participation – in other words no token 1% equity. The same folks argue that some businesses do not sit well with non-Niuean operators.

But it is not all one-sided; some see Namukulu’s application not only as fair competition but also adds another option . Michelle Hight of Namukulu Cottages has posted on social media that their intention is to open for just one night a week offering a different fare from that being offered by Vikki and Toni Kalauni of Hio. She has also offered to talk things over which has earned a retort from Vikki: “The invitation to chat comes after the fact”.

A cursory look at the number of tourism businesses owned and operated by non-Niueans show there are at least eight that are very much alive and appear to be doing well. A quick count of similarly Niuean-owned businesses show a total of approximately 19 of which one-half can be described reasonably doing well. The other half can best be categorised as “it helps to pay for the petrol”.

Information from the Licensor of Businesses indicate that since the introduction of the Business Licence Act 1997 the number of declined applications, as a result of objections, can be counted on the fingers of one hand. The grounds on which the Licensor can refuse an application is clearly defined in section 12 of the Act.

1. The applicant is considered to be unfit or improper to hold such a licence.
2. The business would cause harm or annoyance to the residents.
3. It would result in a serious imbalance in a particular market i.e., unfair competition.

Lunch at Hio Cafe, Niue. PC – TripAdvisor.

If the Licensor fails to issue a licence, the applicant can appeal to the court; the same also applies to anyone who considers themselves to be aggrieved by the granting of a licence. The applicant can also appeal to the court if the condition under which the licence is issued is considered to be untenable. It is also worthy of note that the Licensor is solely responsible for granting or refusing a licence.

Anyone looking to the legislation to provide some protection for Niuean businesses will be disappointed – there is no such provision.

There could be some remedy in the Development Investment Act 1992 but a lawyer is needed for a proper interpretation of that legislation.

Without pre-empting the decision of the Licensor of Businesses there is not much chance that the outcome will be in Hio Cafe’s favour. And as for those calling for the government to provide a better but not necessarily a level playing field for the descendants of the original settlers, again there is not much chance of that happening, not with a right-leaning government in power.

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  1. It appears the licence is for special nights only and should not affect Hio Cafe operations. Both businesses would benefit both directly and indirectly. There will be increased traffic in the area which will create interest of passing trade. A big plus for both one should think. The licence should be granted. Good luck to both businesses, it is a plus for competition and local economy.

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