Liquor leaves bitter taste for Costco, ALDI

Madeleine Heffernan
June 27, 2016
The Age
How long does it take to sell alcohol in South Australia? Years.
One of the world’s biggest retailers, Costco, is still waiting on a verdict from the South Australian courts on whether it can sell alcohol at its Adelaide store.
In 2014, the country’s biggest retailer, Woolworths, teamed up with the Australian Hotels Association to object successfully to Costco’s bid for a special circumstances licence in South Australia.
The state’s licensing court concluded that Costco’s model for liquor retailing was not compatible with South Australian requirements and granting the big-box retailer a licence would risk setting an undesirable precedent.
Costco quickly appealed the decision and said last year it was expecting a result in the second half of 2015.
But Costco Australia managing director Patrick Noone told Fairfax Media the company was still waiting for a determination.
Costco may hope for better luck navigating Australia’s complicated rules on the sale of alcohol than the German discount supermarket ALDI has had.
ALDI was recently blocked from selling 95 liquor products at its new supermarket in Harrisdale, 24 kilometres from Perth, in part because its cheap alcohol posed a risk to public health.
But Woolworths was approved to sell more than 1600 liquor products from its BWS shop at the same shopping centre.
The state’s director of liquor licensing said: “I am of the view that, whilst it would be in the public interest to establish a liquor store within the shopping centre, it is neither necessary or desirable for two packaged liquor outlets to operate at the shopping centre.
“A large percentage of ALDI liquor products are at the lower end of the price scale (i.e. 22 wine varieties are listed at a price below $5.00 a bottle, with three priced at $2.79 and 48 per cent of wine products are priced at less than $10.00 a bottle).
“In comparing the risks associated with each application, the ALDI application poses a greater risk from a broad public health perspective.”
Last year’s Harper review into competition recommended supermarkets be able to sell alcohol in-store rather than in separate areas.
The country’s convenience stores are also pressing to be able to sell alcohol, specifically beer and wine. But Jeff Rogut, chief executive of the industry body the Australasian Association of Convenience Stores, said there was “no votes in it” for politicians, and existing laws entrenched the position of the large retailers.
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