Supreme Court dismisses Costco’s application to sell alcohol at its Kilburn warehouse

Luke Griffiths, Lauren Novak
July 21, 2016
The Advertiser
A PUSH by a cut-price supermarket to add alcohol to its South Australian offerings has been shot down by the Supreme Court.
Chief Justice Chris Kourakis on Thursday dismissed Costco’s application — opposed by the Australian Hotels Association and supermarket giant Woolworths — to sell alcohol at its Kilburn warehouse on Churchill Rd.
The international bulk-buy chain had appealed to the state’s highest court after its initial application was knocked back by the Liquor Licensing Court in October 2014.
Having launched in November last year, Costco wanted to sell alcohol on the same premises as other goods. However, that model didn’t comply with local liquor licensing laws because in SA, to qualify for a retail liquor merchant’s licence, alcohol must not be sold with other goods, such as food.
Costco did not return calls from The Advertiser, but the company had previously argued that it is different from other retail alcohol outlets because it would carry about 300 lines — as opposed to about 2000 in a Dan Murphy’s for example — and will only sell unrefrigerated alcohol, and beer by the case.
It is unclear whether the company will now apply for a standard retail liquor merchant’s licence.
AHA SA general manager Ian Horne said the refusal of Costco’s application “reinforces the notion that alcohol shouldn’t be integrated with other products” in supermarkets.
Mr Horne said the decision was positive for locally-owned bottle shops, and wineries “who won’t be met with a market flooded by non-South Australian own brand wine”.
A review of the state’s Liquor Licensing Act, delivered to the State Government earlier this month, made 129 recommendations including on the sale of alcohol in supermarkets.
The Government is considering the report, by former Supreme Court Justice Tim Anderson, and which measures it may adopt.
Mr Anderson recommended that liquor not be sold in the aisles of supermarkets but could be sold in a separate area “under the same roof”.
That area should be separated by “a permanent and substantial physical barrier”, of about 2.5m, with a separate checkout operated by a responsible person aged over 18 years.
Anyone wanting to sell alcohol in that way would be required to pass a proposed new community and public interest test, in place of the current so-called “needs” test.
Mr Anderson’s report states it is “not correct to say that this change of test will result in a bottle shop on every corner”.
He expected that changes to the current law “will cause a number of new applications” to sell alcohol in supermarkets but that many would not be approved or would not pass the new test.
Mr Horne said he hoped the Government’s response to Mr Anderson’s review would acknowledge “the importance of independent retail liquor businesses and the crucial role of SA’s independent boutique wine industry”.
Attempts to contact Woolworths were made.