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Getting the nanny state out of alcohol retail

By Oliver Hartwich - posted Monday, 28 March 2011

Coming from a country where even petrol stations are allowed to sell alcoholic drinks as 'essential traveller needs,' I have always found Australian alcohol licensing practices rather bizarre. To Australian regulators, beer, wine and spirits seem to be in the same danger category as guns and porn – and thus have to be hidden from the public's view in specialised stores.

This may change if discount retailer Aldi gets its way. The German company, which is already offering alcohol in its outlets in Victoria and the ACT, has applied for a licence to sell drinks in its NSW stores. This would allow them to offer creatively named home brands such as Wild West Kentucky Bourbon, Nebulous Chardonnay, and Santiago beer in their spartan supermarkets, which charge customers for luxuries such as shopping bags and using their credit cards.

Aldi's move, if successful, would end Woolworths and Coles dominating the alcohol market. Their liquor store subsidiaries currently command a combined market share of more than 50%. Injecting more competition would probably have the same effect as Aldi's entry into staple groceries had a decade ago: It would drive down prices.


Beyond this price effect, Aldi's attempt to sell alcohol in supermarkets is most liberating. Whatever the original justifications were for preventing supermarkets from selling alcohol, they are looking increasingly dated.

Licensing laws in Victoria and the ACT are more liberal than in NSW. However, binge drinking or alcoholism appears no worse in Melbourne or Canberra than in Sydney.

Restricting the places that sell alcohol is ineffective in preventing excessive alcohol consumption. Bottle shops located next door to supermarkets do not deter those who want to purchase drinks to get drunk. Consumption takes place at home and not at the checkout, and a bottle of whisky may be consumed over a long period of time or in one violent night.

Protecting minors may be another justification for separating supermarkets and bottle shops. The liquor licensing rules that make it an offence to supply alcohol minors apply to supermarkets as well as bottle shops.

Limiting the social harm from excessive alcohol consumption may be an understandable objective, but limiting vending places for alcoholic drinks does not achieve it. Perhaps more annoyingly, it treats adults like children who have to be protected from themselves.

In other countries, even motorists are trusted not to immediately consume the beer and wine they may purchase at petrol stations. In the Australian nanny state, however, we would be content to get the meat and beer for our next barbecue from the same shop.

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About the Author

Dr Oliver Hartwich is a Research Fellow at the Centre for Independent Studies. His paper No Particular Place To Go: The Federal Government's Ill-Conceived Support for the Australian Car Industry was published by CIS on March 17, 2009.

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