The latest WA liquor licensing fiasco surrounding retailer Aldi provides yet another example of ill-conceived and wasteful government intervention. This time, the main argument is that Aldi wants to sell its liquor too cheaply. No, I’m not joking:

Aldi’s plans to sell alcohol are in jeopardy after WA’s liquor authority found its booze was so cheap it posed a greater risk to public health than other retailers.

The lower price for Aldi’s alcohol products was one of several reasons given by the Director of Liquor Licensing to reject the German supermarket giant’s application to sell liquor at its Harrisdale store.

A full copy of the liquor authority’s decision is here.

Not just price

To be fair, artificial price control was only one of the reasons given by the liquor authority for knocking back Aldi’s application. What can only be described as ‘promotion of general communistic principle’ was another:

An application by the Woolworths-owned BWS two months before Aldi’s application in the same new Harrisdale shopping complex was successful…

It found it was neither “necessary nor desirable” for another liquor store to operate in one shopping centre. 

Since when has necessity been a relevant requirement for opening a liquor store?

That aside, the WA liquor authority now seems to think that it’s ‘desirable’ for shopping centres to have only one liquor store – with the sole liquor trader enjoying the benefits of a government created monopoly. Why Harrisdale shopping centre was singled out for such treatment (when there are countless other shopping centres throughout Perth with multiple liquor stores that have been approved by the same authority) is completely beyond me.

Apparently, it’s relevant that, in 1994, the WA Court of Appeal* held that having a shopping centre without a liquor store under its roof (with the nearest liquor store in the neighbouring tavern) was, of itself, not enough reason to grant a new liquor licence within the shopping centre: see paragraphs 56 and 62 (first bullet point) of the decision.

Needless to say, the liquor authority’s decision is being appealed by Aldi. I’ll leave you to speculate whether ‘erroneously concluding that the WA Court of Appeal set a limit of no more than one liquor store per shopping centre’ will be one of the grounds of appeal.

Further price examination

The first thing that comes to mind is how can ‘Aldi booze’ be ‘way too cheap’, when Dan Murphy’s (5.5 km away) has the ‘lowest liquor price guarantee’?

In this respect, we are treated to yet another example of comprehensive research undertaken by The West Australian:

Nearly two dozen varieties of wine at Aldi are listed at a price below $5 a bottle. (Oh no!)

Three can be bought for $2.79. (Somebody call the police!) 

(Non-italicised comments added).

Ignoring the fact that you can get 10 litres of goon for $20 at any BWS store (i.e. $1.50 per 750ml), let’s complete the West Australian’s ‘bottle based’ research. At the time of writing, Dan Murphy’s (remember, the nearest of which is 5.5 km away and which is also owned by Woolworths) sells: 

• 58 different kinds of red wine for under $5.00 a bottle, six of which are available for under $3.00 a bottle (NB: four are smaller 187ml bottles);

• 47 different kinds of white wine for under $5.00 a bottle, five of which are available for under $3.00 a bottle (NB: three of which are smaller 187ml bottles); and

• 27 different kinds of sparkling wine for under $5.00 a bottle, two of which are full bottles for $2.99.

Now, you tell me: who’s the one selling the most liquor in the area at fantastic, low-low prices?

Serious questions

Putting the price furphy aside, the question must be asked: why is a serious competitor to Woolworths being denied access to this area?

Why did Woolworths encounter absolutely no opposition to its application in the same shopping centre (see paragraph 2 of the decision), while Aldi’s application was objected to or intervened in by the McCusker Centre for Action on Alcohol and Youth, the Executive Director Public Health and the Commissioner of Police?

There is only a single material difference one can point to in this respect. BWS is a dedicated liquor store owned and run by a supermarket company (Woolworths) which often joins its supermarkets and liquor stores together for one-stop shopping. Aldi on the other hand has the temerity to want to combine the two into one store and ditch the pretence. You know, like many other places in the free world:

An Aldi spokeswoman said the retailer was applying for licences at a “limited number of potential store locations” across WA.

She said unlike other supermarkets that sell alcohol, Aldi did not have separate, large format stores and the retailer did not carry any chilled alcohol for immediate consumption.

Selling liquor among groceries not ok

It appears that the WA liquor authority is suffering from some form of totalitarian-induced OCD:

An application by the Woolworths-owned BWS two months before Aldi’s application in the same new Harrisdale shopping complex was successful because the director found it offered “greater benefits to consumers in the locality” because of its bigger size, products at various price points and “purposively separated and delineated” store layout.

I can only imagine that the thinking of the liquor authority and the social justice objectors must go something like this:

By declining Aldi’s application, problem drinkers in the area can now breathe a sigh of relief that they won’t be tempted with any cheap alcohol while shopping at Aldi. Instead, they will have to suffer the inconvenience of walking to the BWS next door or driving down the road to Dan Murphy’s. They’ll never do this as it’s way too much effort and they’ll have little choice but to substantially cut their drinking or quit altogether, particularly given BWS’s super high prices. This will reduce the local crime rate** and will make us feel good about ourselves.

Regular people with convenience and competition issues may raise concerns about this decision. When people do complain then we can very calmly and graciously say, ‘You know what? We’re doing it anyway, tough luck’!

All that’s missing now is to clad every liquor store with cigarette style health warnings and pictures so that everyone can feel suitably ashamed of themselves when they walk in.

The further disgrace in all of this is that, rightly or wrongly, many people are bitterly complaining about the cost of living – and it’s social justice campaigners and government bodies like the ones in this story that keep making basic things more expensive: by both increasing the overhead expenses of retailers and by taking home their government funded pay check at the taxpayer’s expense on matters they never should have been involved in.

Postscript

If you’re interested, here’s some more information on the the decision maker in this matter, Peter Minchin:

Peter Minchin, Director Administrative Law Mr Minchin has more than 27 years experience in the public sector and began working at the Department in 1991. He has been appointed to various senior positions in the Department including Manager Licensing, Director of Liquor Licensing and Principal Adviser to the Liquor Commission of WA. Mr Minchin is responsible for the Administrative Law Division which delivers complex liquor licensing determinations and provides authoritative advice on liquor licensing matters. The Division also provides executive support services to the Racing Penalties Appeal Tribunal, the Liquor Commission, the Problem Gambling Support Services Committee and the Gaming Community Trust.

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(*) Then known as the Full Court of the Supreme Court of WA.

(**) Yes, really, see paragraph 62 of the decision, fourth bullet point.