Nelson bar Mollys has 12 months to improve the way it is run or risks being closed down.
It also faces having its licence suspended for a period, after the Liquor Licensing Authority ruled that an intoxicated woman was found on the premises in April.
An authority hearing was held in the Nelson District Court on Friday, where police made an application to cancel Mollys' on-licence and owner Paul Brydon's general manager's certificate.
An application to renew the licence and Mr Brydon's certificate was also heard by the authority.
Authority head Judge John Hole said that after a visit to Mollys, the authority was worried that the premises were difficult to manage.
He said taking on board the fact that Mr Brydon had already made improvements to the way the bar was operating, the authority was prepared to grant him a licence and renew his general manager's certificate for a year.
However, he warned Mr Brydon that changes were needed.
"At the moment we think these are really difficult premises for you to be able to meet your obligations under the act," Judge Hole said.
"We will renew your licence and certificate . . . but you have got to change the operation substantially in the next year."
In March, the authority gave Mr Brydon six months to improve his management practices, following sale of liquor breaches at the Bridge St bar.
Mr Brydon was required to prove that he had reduced noise in the bar and was providing food of a substantial nature. He also had to train other staff to get their manager's certificate. He told the court yesterday he had done those things.
Judge Hole said the size and layout of the bar meant that the duty manager needed to be walking around checking patrons the whole time, and should not be serving behind the bar.
He said Mr Brydon needed at least two other people trained as duty managers.
Judge Hole said Mr Brydon had given evidence that staff checked the bar every 30 minutes.
However, this was unacceptable, he said. Checks should be made every five minutes.
Judge Hole said Odyssey bar, which was on the Mollys premises, needed to have a person in it with a duty manager's certificate before it could open.
The bar is owned by Mr Brydon, who is trying to sell it, and its liquor licence comes under Mollys' licence.
At the hearing, police gave evidence of two incidents where they said intoxicated people were found on the premises at Mollys this year.
The authority found it had proved an incident in April where an intoxicated woman was asleep on a couch in the upstairs bar.
Constable Jason McDonald said police were conducting checks of licenced premises, and during a check of Mollys they went upstairs to check the upstairs bar.
Mr McDonald said a staff member saw the police arrive, and walked over to the woman and lifted her off the couch.
She was clearly intoxicated, and needed assistance to walk out of the bar.
Outside, she leaned against a wall, and when police asked for her name she was unable to answer at first, repeatedly saying "One, two, three". Mr McDonald said police were eventually able to get her name.
Sergeant Blair Hall said he had warned Mr Brydon 50 minutes earlier that police would be visiting the bar to check for intoxicated people.
Mr Hall said he saw Mr McDonald asking the woman for her name, and she repeatedly replied "One, two, three".
He described her as grossly intoxicated.
Mr Brydon said the woman was tired after a long day at work, and had come into the bar about 10 minutes earlier to find her daughter.
He did not think she was drunk. He thought she was slurring her words because she had just woken up.
"I thought she was very tired . . . there is a difference between intoxication and tiredness."
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