NEW RESEARCH SUPPORTS CASE FOR ALCOHOL IN CONVENIENCE STORES

MEDIA RELEASE
November 8 2012

NEW RESEARCH SUPPORTS CASE FOR ALCOHOL IN CONVENIENCE STORES

With new forecasts from a leading analyst predicting approximately $17.2 billion will be spent in bottle shops this financial year, the two usual groups emerge as the major benefactors: the major supermarket operators. It’s an unsustainable scenario that needs to end, according to the Australasian Association of Convenience Stores (AACS).

IBISWorld forecasts alcohol spending is expected to increase by 20.5% over the next five years to reach $39.9 billion by 2017-18, with $19.9 billion of this to be spent in bottle shops.

AACS Executive Director Jeff Rogut said when you consider that, between them, the two major supermarkets enjoy an estimated 60% share of the packaged liquor market, the negative ramifications for competition are obvious.

“The independent liquor store, like so many other independent retailers, is disappearing behind banners associated with the two major supermarket chains. More distressing is the fact that the ACCC, despite vowing to do more to address the uneven playing field for small retailers in this country, continues to sit idly by and do nothing,” Mr Rogut said.

“The AACS has repeatedly put its case to Government to discuss the business case for convenience stores being permitted to responsibly sell packaged liquor to improve their ability to compete. However, all the rhetoric emphasising Government’s commitment to support retailers and small businesses has to date been empty of meaning and action.

“The release of these figures puts the need for an unemotional, level headed discussion of this issue back on the agenda,” he said.

Interestingly, the IBISWorld research suggests Australians are actually drinking less, with the forecast increase to alcohol spending attributed to an increased appetite for premium beverages and categories other than beer.

“If Australians are drinking less, but the major supermarkets actually stand to make more, surely this is the optimum time for Government to take a fresh look at what the convenience industry is actually proposing,” Mr Rogut said.

“Enabling Australian convenience stores to stock a limited range of packaged alcohol, as their international counterparts on all other major continents are able to do, would provide a potentially crucial new revenue stream for retailers in these challenging times.

“It would also promote competition to address the unsustainable market share currently enjoyed by the majors, which has reached absurd levels in the context of a free market economy.

“We acknowledge the emotional response to more outlets through which consumers can purchase alcohol. However, considering the expanding store networks of the major chains, as well as the fact that alcohol can already be purchased at all hours through late night drive through bottle shop trade, the emotional response is without foundation in a practical sense.

“It is unfair that convenience stores are unable to compete in the packaged liquor market, particularly given the difficulty small business has competing with the supermarket duopoly in both in store sales as well as discounted petrol sales.

“Unfortunately, the deck remains heavily stacked in favour of the major chains. Measures to level the playing field for small retailers are yet to receive due consideration at a legislative level. It’s a situation that requires urgent attention,” Mr Rogut said.

The AACS continues to lobby policy makers in an attempt to stem the flow of market share toward the major supermarket chains and protect the viability of the approximately 5,500 convenience stores operating in Australia.

Further information:
Jeff Rogut
Executive Director
Australasian Association of Convenience Stores
Ph: 0467 873 789