Nearly a quarter of Dunedin bars and alcohol retailers targeted in controlled purchase operations last year failed the test, the Dunedin City Council says.
The results have left council liquor licensing and projects officer Kevin Mechen "gutted".
Figures to be presented to the council's planning and environment committee next week showed police carried out 76 controlled purchase operations in Dunedin in the 2011-12 year.
Of those premises targeted, staff at 18 sold alcohol to volunteer underage buyers - a failure rate of 24%.
The "disappointing" result represented a big increase on 2010-11, when 42 venues were targeted and just two failed the test, meaning a failure rate of 4.8%.
In 2009-10, 25 venues were tested and two failed - a failure rate of 8%.
The latest figures showed 57 of the 76 venues tested by police were on-licence venues, of which 13 failed.
Mr Mechen put the results down to bar staff assuming door staff had checked for proof of age from all patrons inside the venue, when some underage drinkers were able to slip through.
"The onus is on the bar staff to check."
Mr Mechen was "quite gutted" by the results.
"That's quite a big jump and I don't see many excuses for it.
"It was a pretty disappointing result."
Being caught meant referral to the Liquor Licensing Authority in the first instance and a licence suspension, usually for "one or two days", he said.
"It doesn't sound much, but it's a big chunk of income."
He and police would be working with the businesses to ensure compliance in future.