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New Zealand’s major supermarket chains are keen to "engage" with the Dunedin City Council after key parts of its alcohol policy were rejected.

The Alcohol Regulatory and Licensing Authority (Arla) last week ruled parts of the policy were "unreasonable", including a proposal to cut off-licence hours from 7am-11pm to 9am-9pm and for a moratorium on bottle stores in North Dunedin.

The decision puts the ball back in the council’s court. It  can now either come up with new proposals or appeal the decision, which Mayor Dave Cull said it was considering.

Foodstuffs, which  with Countdown appealed the  original proposal, said it was pleased with the "clarity" Arla’s  decision provided.

A spokeswoman said it was important  to participate in the process Parliament had set up for local alcohol policies.

"Part of this process includes consultation with stakeholders, and for proposed policies to be checked by the independent Arla to make sure the policies are reasonable," she said.

Foodstuffs would continue to "engage" as the council reviewed its process, she said.

Countdown spokesman James Walker said it was reviewing the  decision and "working to understand what it means for our business".

"We look forward to the opportunity to work  ... with the council on this issue to ensure we achieve a good outcome for the Dunedin community."

The University of Otago,  long  concerned about the density of liquor outlets in North Dunedin, declined to comment on Arla’s decision, but vice-chancellor Prof Harlene Hayne reiterated her views on the issue.

"The research is crystal clear that a high level of availability and promotion of alcohol on and around campus leads to excessive drinking," she said.

"We believe that there are too many liquor outlets in North Dunedin.

"I have previously stated that dealing with these issues in North Dunedin is like ‘bailing out the Titanic with a thimble’. 

"I stand by that comment."

vaughan.elder@odt.co.nz