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Absolutely Nails this Variety in the Australian Context












Use & Abuse
Can There be Too Many Retail Liquor Licences?
Sunday, 6th May, 2012  - David Farmer

"PARTS of NSW are saturated with bottle shops and any increase would cause social harm, the head of the state's liquor licencing authority has declared after it ruled on 20 applications by the supermarket chains Coles, Woolworths and Aldi"*. Sydney Morning Herald, January 27th, 2012.

Is there any point in restricting the number of retail liquor stores? I favour no limits so if you want to gamble in this area of business you can, as customers will decide soon enough whether you make money. Currently the sale of liquor is controlled by two groups, Woolworths and Coles, with Woolworths the dominating power. Everyone else retailing packaged liquor, known as the off-licence trade, which adds up to tens of thousands of licenced premises, are just followers.

I have argued in a number of articles, including a long five part series last year called the Liquor Wars, that the only way to boost competition, apply pressure to this duopoly, and increase consumer choice, no matter that this is very hard, is to continue with deregulation. This has been happening in Victoria and New South Wales, and partly in Queensland, over the last ten years. Naturally quite a high percentage of the new licences granted have gone to the two supermarkets which paradoxically has allowing them to tighten their grip, but complete deregulation is the only sensible way forward.

Now the dangers of excessive alcohol consumption make its sale a sensitive issue thus the granting of new licences, and other aspects such as advertisements, and alcohol taxes, are constantly in the news.

At times these concerns lead to silliness and a recent favourite was a long story in the Sun Herald, December, 2011 by Alicia Wood about a kid who receives his comics in the mail and found in one, a brochure offering wine. This story included comments from Pacific Magazine which publish the comic and own the database, Cellarmasters who made the offer, Woolworths who own Cellarmasters, views from the mother, and finally the reporter managed to drag in the Australian Privacy Commissioner; this being a fine example of much ado about nothing.

This at times extreme sensitivity about alcohol issues is partly the result of the large number of health related groups raising concerns, about the costs of alcohol abuse to society. This in turn leads to recommendations for change which focus on curbing and ideally lowering alcohol consumption.

The health lobby is certain that to bring this about two changes are needed which are restrictions on the number of off licences and increases to liquor prices by higher taxes.

I am not sure how restricting licences will lower consumption as it would seem the 'horse bolted' a long time ago and I wonder if those proposing this have pondered the modern transport system and the role of the car. One thing retailing has taught me is that consumers will travel a long way for a bargain.

If a ban was placed today on new licences we all know it would not affect consumption one iota. There may though be a case for restricting opening hours under some circumstances and I see little need for stores being open late in the evening and the Melbourne experience of 24 hour licences in the centre of Melbourne is a bit adventurous. Having access to a bottle of vodka at 3 am is not a smart idea.

As for using pricing to lower consumption it would work I suppose if pushed to an extreme level but would quickly create numerous other problems like smuggling. And in any case I wonder about the sensitivity of price and consumption. Consider wine casks which are the cheapest way to buy wine yet have been experiencing falling sales for 15 or so years.

It seems to me that what the great numbers of professionals concerned about alcohol abuse are really signalling when they promote these two ideas to curb consumption is that they are devoid of ideas as to what to do.

*I might add that the chairman of the Casino, Liquor and Gaming Control Authority, Chris Sidoti, is a skilled public servant and has show he says one thing while doing another.

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