Theo Foukkare provides industry update at AACS Connect 24

Theo Foukkare, CEO of the Australian Association of Convenience Stores (AACS), provided an industry update to over 620 attendees at AACS Connect 24.

Speaking at the Hyatt Regency in Sydney, Foukkare discussed the challenges and opportunities that are currently facing the industry and the association’s priorities for the year ahead, which include merchant fees, retail crime, health and nutrition, vaping, illegal tobacco, and alcohol.

Discussing health and nutrition, Foukkare spoke of AACS’ partnership with the National Retail Association (NRA) as well as the impact of a potential 20 per cent tax on sugar beverages should the Federal Labor Government be re-elected. 

“The health lobby in Australia is a very powerful lobby, and their view is just to tax everything they possibly can. In their view, customers will reduce their consumption of these products if they were more expensive, and they think it will reduce childhood obesity. But this type of tax has been around the world for years in some countries. We see a short-term impact, and then no real impact on the actual health outcome that they’re looking to achieve. So, for us, this doesn’t make sense.

“This is not just for beverages. This is for absolutely every supplier and retailer in the room. The impact of having our second-largest category impacted and the associated purchases that go along with that from a bundle perspective is massive. I think this is an area that if we don’t fight for, there’s going to be some significant challenges for the industry.”

Moving to alcohol, Foukkare said the industry has been trying to deliver alcohol deregulation for nearly 35 years and, at the moment, can’t promise an exact time frame for change, but that AACS is engaged with all relevant government stakeholders, as well as with retailers in the industry.

The AACS has a clear policy position on this, and all industry stakeholders have a very clear understanding of what the industry is seeking.

“We’ve made our policy extremely clear to all state governments, particularly with a focus on two or three. AACS hopes to be able to share more information on this reform when it is able to.

“Ultimately, it really comes back to how the wheels of government move and I’m doing everything that I can every day that I wake up. This is a billion-dollar opportunity for us. It’s an opportunity that is also going to drive associated purchases. We’re going to sell more snacking items. We’re going to sell more beverage items. We’re going to sell more food items, and we’re hopeful to sell some alcohol in a restricted format.”

Turning to illegal tobacco, Foukkare spoke of the significant economic cost, with $4 billion in lost excise.

“We’ve got thousands of stores breaking the law, there’s poor enforcement, and there’s huge profits. So, we’ve been doing a fair bit of work in the space.

“We’ve had some wins in the regulatory space. We had an announcement earlier this year with the federal government finally acknowledging that illegal tobacco is a problem. And they’re allocating $188 million to increase enforcement at the border, and to share some of that funding with their states and territories so that they can tackle this problem.”

Speaking on the hot topic of vapes, Foukkare spoke of AACS’ goal of shutting down access of vapes to kids, but offering adults a safer, regulated product that people know what it contains.

“Most people think that the current government’s policies have failed. Unfortunately, the government doesn’t think that just yet. And eight in ten voters want to regulate it, like alcohol and tobacco, so there can be strict controls that are easy for everyone to understand – ultimately keeping it out of the hands of minors.

“Just to be clear on our policy, our policy is very simple. We only want adults to be able to buy these products. We only want licensed retailers to be able to sell this. We want strict product standards. We need a uniform licensing scheme around the country. We don’t want flavours that target kids, there only needs to be a small flavour range. There has to be mandatory product stewardship. We can’t have these things ending up in landfill and causing havoc, and we really need strict enforcement.”

Foukkare discussed the impact of merchant fees and explained that by tapping your phone or watch to purchase a product, the merchant fees can be 12 times more expensive than tapping your card on a terminal.

“Most people aren’t aware of the explosion in merchant fees unless you’re a retailer. Retailers are actually spending about a billion dollars on excess fees that they shouldn’t be, and unfortunately, these fees flow through to the consumer price.

“We’re doing some work in this space to try and get the government to mandate this, to force the banks to make sure that they can’t get away with this; there should be one simple approach because it’s affecting everyone.”

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