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If you can't beat 'em, join 'em: new strategy for liquor in supermarkets

Business

South Australia’s independent supermarkets have taken the ‘if you can’t beat ‘em, join ‘em’ approach in their fight to sell liquor.

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The state’s key lobby group for SA independent supermarkets has argued they should be permitted to operate bottle shops in or next to their businesses similar to their larger multinational competitors.

While authorities argue they can do so under the current laws, the independent supermarkets say the Liquor Licensing Act’s “needs test” acts as an “insurmountable barrier” to securing a merchant’s licence.

South Australian Independent Retailers (SAIR) executive spokesman Colin Shearing told InDaily independents wanted the right to set up “a store within a store” similar to some of the set-ups in Woolworths’ and Coles’ SA businesses.

“We should be able to have a store within a store,” he said.

“Why can’t we do this?

“Why are Woolies and Coles able to operate liquor stores within or next to their supermarkets and SA independents cannot?

“They’ve pushed the envelope and have the stores. All we want to do is have a choice for our customers.”

SAIR was one of 85 public and industry submissions received by the Attorney-General’s Department to the SA Liquor Licensing Discussion Paper, the first large-scale review of the Act in 20 years.

In its submission to the review, SAIR has called for the redefinition of existing Retail Liquor Merchant’s Licences which, they say, contain “restrictive conditions” which prevent independent operators entering the packaged liquor market.

SAIR has focused on sections 32 and 37 of the Act which cover hotel licence’s trading rights and the merchant’s licence, under which supermarket licences are generally granted.

They also want Section 58 (1) and (2), otherwise known as the “needs test” to be removed and expressed concern over Section 77 (1) which gives anyone over 18 years the right to object.

“The need test represents a significant and often insurmountable barrier to entry for new entrants to the packaged liquor market,” SAIR’s submission stated.

“Despite the provisions of Section (53 (1) of the Act which provide that the licensing authority ‘is not to take into account an economic effect on licensees in the locality affected by the application’, it is extremely common for objections to applications for Retail Liquor Merchant’s Licences to be lodged and pursued by commercial competitors.

“The vast majority of contested applications for Retail Liquor Merchant’s Licences are pursued by competitors whose motives are commercial by nature.

“By way of example, we understand that in the last two years there have been only four Retail Liquor Merchant’s Licence applications which proceeded to contested hearings before the Liquor Licensing Court of South Australia, none of which involved objectors with non-commercial interests in the application.”

SAIR has called for a redefinition of the merchant’s licence to allow independents to set up liquor stores within or adjacent to their supermarkets.

“This approach is perfectly illustrated by the existing BWS (Woolworths) premises in Rundle Mall,” the submission states.

Independents want the same liquor shop opportunities as the multinationals.

Independents want the same liquor shop opportunities as the multinationals. This BWS store, fore example, is hosted within the Woolworths store in Rundle Mall.

“The licensed premises comprise a self-contained liquor store existing wholly within the Woolworths supermarket premises.

“Although the BWS store is physically partitioned from the supermarket, and has separate cash registers, customers of the BWS cannot access the liquor store without first entering the supermarket premises, via the supermarket entrance/exit to Rundle Mall.

“The BWS store does not have an entrance/exit point to Rundle Mall or any other external road/walkway.”

Independents acquired a strong ally last month when German mega supermarket Aldi also submitted to the review.

Aldi confirmed it had made a submission to seek changes to the Act to allow alcohol to be sold in supermarkets – a service already provided by the chain in several eastern states.

Home-brand and international wine, beer, cider, spirits, champagne and sparkling wines are already sold in their New South Wales, Victoria and ACT stores.

State liquor laws prevent alcohol being sold in Queensland stores.

An Attorney-General’s Department spokesman told InDaily independent stores were not prevented from applying for a liquor licence.

“The retail liquor merchant must be physically separated from premises used for other commercial purposes,” the spokesman said.

“There are existing bottle shops adjacent to supermarkets.

“Recently a licence was granted for a retail liquor merchant’s licence at Findon in a premises adjacent to the Foodland supermarket.

“There are no laws preventing independent supermarkets from operating a liquor store next to their supermarket, and an application from any supermarket would be treated in exactly the same way, regardless of whether it’s an independent or a large chain.

“All applicants for a retail liquor merchant’s must satisfy the licensing authority that existing licensed premises do not adequately cater for the public demand (known as the ‘needs’ test).”

Shearing said the needs test must be removed as it allowed objections from strong competitors, such as the Australian Hotels Association, to effectively block licence applications.

“They should be abolished,” Shearing said.

Shearing said allowing the sale of alcohol would generate one of the biggest change for SA independent supermarkets with an estimated 60 per cent of the 236 independents poised to offer alcohol sales to their customers.

“Massive. The change would be massive,” he said.

“There’ll be different customers, there’ll be more producers in the stores. It will be more innovative, more to offer.

“Could you imagine IGA and Foodland sponsoring the Tour Down Under in the future?”

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