The Australasian Association of Convenience Stores (AACS) has supported the competition watchdog’s calls for a review into liquor licensing, stating a review must also address the grocery major’s dominance in the packaged alcohol market.
AACS CEO Jeff Rogut welcomed comments from Australian Competition and Consumer Commission (ACCC) chairman Rod Sims this week reinforcing the importance that retail regulations around liquor licensing and planning and zoning don’t have unintended competition consequences.
“We support the Harper Review’s calls to ensure retail regulations around liquor licensing and planning and zoning don’t have unintended competition consequences,” Mr Sims told Fairfax Media.
Last year the Harper Review recommended a review of planning and zoning rules, deregulating trading hours and the introduction of an ‘effects test’, referred to as Section 46, in an effort to protect small businesses from large corporations who abuse their market power.
Mr Rogut said a review into liquor licensing must also recognise the opportunities to improve competition.
“Enabling convenience stores to compete in the packaged alcohol market would open up an important new revenue opportunity for small businesses. There’s no credible business reason our members should be prevented from competing in this space and the emotional case is easily debunked by the fact that liquor is already widely available around the clock from many different outlets.
“All we are seeking is the right to compete as well. Any review into liquor licencing must address the existing anti-competitive environment and consider the business and consumer benefits of deregulation.”
Mr Rogut said based on the contribution of beer and wine sales to convenience store profitability in the US and UK, enabling local stores to participate would drive more than$500 million in additional sales per year for the convenience industry.
“Our members were optimistic that the competition policy review would generate a more level playing field in a market worth billions yet dominated by the two majors with their various store formats and brands. Unfortunately the review was a missed opportunity, one we hope a subsequent focus from the ACCC will address,” Mr Rogut said.
Alcohol purchasing habits align with convenience model
Mr Rogut said consumer purchasing habits when it comes to packaged alcohol align perfectly with the convenience store model. When purchasing packaged alcohol, consumers desire convenience and quick service while being influenced by store display, layout and product.
An August / September 2016 survey commissioned by AACS of 4000 Australian consumers aged 18 years and over showed that 59 per cent of consumers who purchase alcoholic drinks would be likely to do so from their local convenience store if the store was licensed to sell alcohol.
“Not only do retailers stand to benefit from being able to participate in a valuable market, suppliers would have a new avenue to showcase their products, new employment opportunities on both sides would be created, and consumers would benefit from increased competition,” Mr Rogut said.
“Convenience stores around the world are able to participate in the packaged alcohol market. Australia is lagging behind, so a review into liquor licensing presents an opportunity to help our small retailers and our economy at large.”
AACS has also called on the many beer and wine suppliers squeezed out of the major chain outlets due to their focus on home brands, to work with the convenience industry to increase the pressure on government and promote a more level playing field.