US retail giant Costco is taking its battle to sell alcohol in SA to the Supreme Court
US RETAIL giant Costco is trying to broaden the supermarket war to another front, taking its battle to sell alcohol in SA to the Supreme Court.
Costco on Churchill Rd. (Picture: Naomi Jellicoe)
The bulk-buy retailer has appealed to the state’s highest court for a licence to sell liquor at its Kilburn outlet.
But the Australian Hotels Association is warning any such move — if approved — will set a dangerous precedent and be another stake in the heart of small alcohol retailers and SA wine producers, who are struggling to make a profit.
Costco’s bid has been opposed by nearby pubs and Woolworths, which owns liquor retailers Dan Murphy’s and BWS.
Costco, which opened its Kilburn warehouse on Churchill Rd in November, had its application for a licence to sell alcohol knocked back in the Liquor Licensing in October, triggering its appeal to the Full Court of the Supreme Court, which will be heard next month.
Under SA law, to qualify for a retail liquor merchant’s licence, alcohol must not be sold with other goods, such as food.
It is this element of the law which prohibits supermarkets selling alcohol. Costco has attempted to get around this by applying for a “special circumstances licence’’.
AHA SA general manager Ian Horne said allowing this to happen would create a dangerous legal precedent which was likely to be exploited by other operators.
“Competition for liquor retailing is extraordinary already and our interest is particularly for trying to preserve a role for independent retailers,” Mr Horne said.
“We already know that something like 78 per cent of all Australian wine is sold by the major grocers and that’s put massive pressure on the wine producers because of pricing structures and trading practices.
“We’re not sure that the Costco model adds any value to consumers in terms of choice, quality and it certainly would be a further undermining of the independent retailers.’’
Costco has argued that it is different from other retail alcohol outlets because it will only 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 also contends that it is different to other retailers because shoppers have to be members, paying $60 per year to shop at the store’s outlets.
Judge Brian Gilchrist, in rejecting Costco’s application to the Liquor Licensing Court last year, said it was plain that only a retail merchant’s licence was relevant for Costco, and it was “implicit that the holder of a retail liquor merchant’s licence must sell to the public generally’’.
He also found there were clear reasons why it was not eligible for such a licence.
“It is a condition of a retail liquor merchant’s licence that the licenced premises must be devoted entirely to the business conducted under the licence and must be physically separate from premises used for other commercial purposes,” he said.
Costco is arguing that “a Costco outlet is something quite/totally different from a Dan Murphy’s or a BWS or Liquor Land or First Choice or other retail liquor store or hotel, bottle department or liquor store’’.
The company is arguing therefore, that it should be able to be granted a special circumstances licence, rather than the more restrictive retail merchant’s licence.
The company has declined to comment.
cameron.england@news.com.au
Source: Adelaide Now - The Advertiser, Cameron England, June 25th 2015
