Liquor in supermarkets 'threatens Queensland pubs'

New laws under consideration by the Queensland Government to allow the sale of alcohol in grocery stores could severely undermine the state's hotel industry, according to hotel advisory firm PJT Accountants.

The Newman Government this year released a discussion paper asking for input on the future of the state's liquor and gaming laws, with alcohol in supermarkets among the options on the table.

PJT partner Wayne Patten told TheShout he recently met with Attorney General Jarrod Bleijie, who has responsibility for the state's liquor and gaming portfolio, to raise the concerns of hoteliers.

Patten said grocery operators such as Aldi and IGA claim to be unfairly discriminated against by not being able to sell alcohol in a similar way to mega chains Coles and Woolworths. 

He said he explained to Bleije that in order to obtain this competitive advantage, Coles and Woolworths were required to purchase a local hotel to obtain the necessary liquor licence, an astute move overlooked by smaller operators and a significant investment which saw positive growth in business valuations throughout the industry.

"These businesses have committed hundreds of thousands of dollars into purchasing and setting up detached bottleshops, and in the process employing thousands of Queenslanders," he said.

Patten, who previously owned a pub himself and still represents many hoteliers through PJT's specialist hotels division, said many Queensland hotels are currently "hanging on by a thread".

"In some cases bank valuations are just 50 per cent of the value they enjoyed just four to five years ago when the industry was booming," he said.

"Many hoteliers are committed to long-term leases, negotiated when the market was buoyant. In this much tougher market, margins are thin but the lease outgoings remain constant."

He said PJT's belief is that the valuations of hotels will be severely impacted by allowing supermarkets to sell alcohol.

"This opinion is shared by leading banks and bank panel valuers, as a reduction in bottleshop sales will ultimately mean a reduction in profit, thus less value in the hotel," Patten said.

Patten claims that if Coles and Woolworths are not required to own hotels for the sale of liquor, they may sell their hotel interests should the legislation pass, and therefore flood the market - further reducing hotel valuations.

Source: The Shout, 13 May 2013