Operating a NSW BYO Restaurant versus a NSW Licensed Restaurant

Many successful restaurateurs consider whether they should operate a BYO restaurant (where customers can bring and consume alcohol that they have purchased elsewhere) compared with operating a licensed restaurant (where customers have the convenience of purchasing and consuming liquor at the venue with their meal).  In the paragraphs that follow we offer some useful information to assist in the decision-making process.

A BYO Restaurant:

In NSW a liquor licence is not required for a BYO restaurant.   However, the operator must still have in place the required planning approvals, issued by the local consent authority, that match the business model of the restaurant and comply with its terms.

Whether you operate a BYO restaurant or a licensed restaurant, there are responsibilities on the operator to minimise alcohol related harm.  For example, it is illegal :-

  • for a person to supply liquor to a minor in a BYO restaurant. This applies to staff and customers unless the person is the parent or the guardian of the minor. The maximum penalty is $11,000 and / or 12 months imprisonment in aggravated circumstances; and

  • for a minor to drink liquor in a BYO restaurant unless they are authorised by their accompanying parent / guardian. The maximum penalty is $2,200.

Irrespective of the above, the operator of a BYO restaurant can refuse underage drinking at their restaurant, even where a parent or guardian is the person who is supplying the liquor.

Where there is a concern with minors accessing alcohol then you or your staff could consider measures to reduce the risk.  Such as arranging to - (a) remove wine glasses from minors seated at dining tables; (b) request a proof of age document to establish young people are 18 or above before service; (c) identify and monitor other young people i.e. who are under 18; (d) ensure alcohol is not left unattended on dining tables; (e) display the notice that it is an offence to supply liquor to a minor; and (f) ensure that customers are aware of your policies and procedures through other appropriate signage in the restaurant.

The offence of permitting intoxication or serving liquor to an intoxicated person does not apply to BYO operators. Nevertheless, NSW Liquor, Gaming and Racing (LGR) believe all premises should be operated responsibly and that as part of any house policy that intoxication and irresponsible serving / drinking practices be discouraged.

While RSA training is also not mandatory for people working in a BYO restaurant, operators are encouraged to consider this training for themselves and their staff.  This is because participants in RSA training gain a better understanding of the responsible serving laws, best practices in serving liquor and operating a venue, and strategies that can be adopted to minimise alcohol related harm.

A Licensed Restaurant:

A liquor licence must be obtained for the restaurant before it can lawfully sell liquor to its customers. This includes situations where liquor is included in the price of a meal e.g. a glass of wine is included with their meal.

Many restaurateurs consider it worthwhile applying for a liquor licence notwithstanding there are costs involved in applying for one and there are on-going annual fees payable to LGR (which vary depending on the location of the restaurant and if any endorsements apply).  You can obtain further information as to how the annual fee is calculated by clicking on the link that follows:- https://www.liquorandgaming.nsw.gov.au/operating-a-business/liquor-licences/liquor-licence-fees/annual-liquor-licence-fees

On the positive side alcohol sales are likely to boost your takings as there is a high-profit margin on the sale of alcohol.  This in turn is likely to assist your business grow and prosper. There is also a general expectation in 2019 that most restaurants provide the option to their customers of liquor service with their meals. The benefit of a liquor licence is that you can meet the reasonable requirements of your customers at short notice.

The most suitable type of liquor licence for a restaurant operation is an on-premises licence with an approved business activity of “restaurant”.  This type of licence allows the licensee to sell and supply liquor to its dining customers.  If you wish to have the flexibility of also serving alcohol to some customers who do not plan to dine, then a primary service authorisation can also be obtained.

All staff involved in the sale or supply of liquor must hold a Competency Card that is certified with RSA Training.  The Licensee or Approved Manager (as the case may be) will also be required to undertake additional training i.e. Licensee Training or Advanced Licensee Training (as the case may be). The licensee and staff must not supply liquor to minors or an intoxicated person.  Measures should be put in place for staff to monitor customers and refuse service to any person who is quarrelsome or approaching intoxication.

Who can apply for a liquor licence?

Any person who is 18 years or older or a company can apply for a NSW liquor licence. Where the company is the proposed licensee then an individual is to be appointed its approved manager.  To make the application the individual or future approved manager must provide a valid National Police Certificate and Competency Card to LGR that is endorsed with the required level of training.  


There is no doubt that a liquor licence can result in a significant financial and commercial advantage for most restaurants. The key is tailoring the liquor licence to meet your business model, so you (and your customers) gain the most out of it.  The costs of obtaining an on-premises licence, together with paying annual fees to LGR so it remains current, are off-set by increased profit margins.  This means that overall there are clear benefits to restaurateurs in licensing their restaurants.

The team at Back Schwartz Vaughan are highly trained and can consider your business model and provide a cost-effective solution to tailor a liquor licence to suit your needs.  If you are interested in considering your options then please do not hesitate to contact either Tony Schwartz, Monica Corazza or Therese Power.