Costco's SA liquor licence knocked back
Photo : Costco has already opened interstate, including in Canberra (pictured), and plans to
open the first of three SA stores at Kilburn. (ABC News Clarissa Thorpe)
American retail giant Costco has hit a hurdle in its Australian expansion, with a court knocking back its application for a licence to sell liquor at its first Adelaide outlet.
It was unclear what impact the decision would have on the retailer's plans to open the first of three South Australian warehouse stores at Kilburn next month.
Costco applied for a Special Circumstances liquor licence instead of a normal merchant's licence because, unlike other bottle-shops, it sold to paying members and is not open to the general public.
It planned to stock about 300 kinds of bulk beer and wine for members who pay an annual $60 fee.
That fee also entitled members to purchase just about anything including car tyres, jewellery, sporting goods, gardening tools, baking items, clothes, meat, electrical appliances and petrol.
Costco's liquor licence application was opposed by a competing bottleshop and two nearby hotels.
After a hearing in August, Licensing Court Judge Brian Gilchrist yesterday refused the application, saying it was not in line with community standards.
He said granting Costco a Special Circumstances licence would have been a "concern" since it would enable the retailer "to sell liquor for off-licence consumption to a limited section of the public".
"It may set an undesirable precedent for the grant of further special circumstances licences," he said.
"The only rider here is that that section of the public, other than employees, must pay $60 a year.
"What would prevent another applicant putting up the same business model with a membership fee of say $20? If that were allowed could another suggest the same model with a $10 fee?
"Many retail stores run loyalty programs. Many retail stores can be expected to wish to sell take-away liquor.
"It would not take a lot of imagination for a retailer to construct a loyalty program in a way that mirrored Costco's business plan."
Judge Gilchrist said approving the licence could lead to "a proliferation of such licences that might compromise the interests of the liquor industry and its appropriate regulation and control".
He said he accepted the "undoubted attractiveness" of the retailer's proposal.
"No doubt the addition of a facility within the store enabling the purchase of first class liquor at competitive prices is something that the public can be presumed to want," he said.
"That said, even without this licence Costco's customers have access to an attractive, modern retail liquor store within the Churchill Centre and a drive-through bottle department with a walk-in section, almost directly opposite on the other side of Churchill Road."
Costco was approached for comment.
Source : ABC New 18th October, 2014 Loucas Founteen
