Coles Liquorland Appeals Liquor Store Test

Jul 22, 2021

In May 2020 Liquorland (Australia) Pty Ltd applied for the grant of a liquor store licence in premises to be located at the Karrinyup Shopping Centre.

The proposed premises had a floor area of 150 m² and would carry Liquorland’s usual range of beers, wine and spirits and ancillary products.

There is an existing BWS liquor store in the Centre.

Liquorland’s application was refused by the Director of Liquor Licensing and on review by the Liquor Commission.[1]

On 21 June 2021 Coles Liquorland was successful in obtaining an urgent appeal order for the hearing of an appeal against the Liquor Commission’s refusal of its application.[2]

The appeal concerns the interpretation of the test in s 36B (4) of the Liquor Control Act for the grant of a liquor store licence.

Background

Since November 2019 an applicant for the grant of a liquor store licence must show that the requirements of consumers for packaged liquor in a locality cannot reasonably be met by the existing packaged liquor premises in that locality.

Previously, applicants only had to establish that the grant of the application would be in the public interest, and this could be established on the subjective evidence of consumer requirements, regardless of the existence of nearby outlets.

The new test was introduced as a strategy to minimise the adverse impact that packaged liquor outlets can have on the community. In order to prevent the further proliferation of small and medium packaged liquor outlets in Western Australia, the Liquor Control Act was amended so that the licensing authority must not grant an application for a packaged liquor licence unless it is satisfied that existing premises in a locality cannot reasonably meet the requirements for packaged liquor in that locality.

In the hearing before the Director of Liquor Licensing and before the Liquor Commission, Liquorland argued that the requirements of consumers for packaged liquor in a locality included requirements of consumers as to matters of taste, convenience, shopping habits, shopper preferences and the like.

Liquorland argued that when considering “requirements” the licensing authority must have regard to the consumer requirements for the benefit of one-stop shopping and competitive co-location which reflect contemporary standards, expectations and shopping habits in accordance with the proper development of the liquor industry when assessing whether the local packaged liquor requirements cannot be met by existing outlets.

The Director of Liquor Licensing and the Liquor Commission both preferred a narrow construction of the phrase “requirements of consumers for packaged liquor in the locality” as referring to requirements for packaged liquor itself (for example, requirements for liquor of a particular type, such as bottled table wine).

The Liquor Commission ruled that there is nothing in the Liquor Control Act which supports the view that consumer requirement for “packaged liquor” means anything other than a requirement for a physical product and does not reference any other services and benefits associated with the provision of such liquor.

The Liquor Commission decided that the proper development of the liquor industry may include considerations that prevent the proliferation of packaged liquor stores.

The Liquor Commission decided that the correct interpretation of section 36B(4) is that “requirements” for packaged liquor as a physical item/product distinct from “requirements” as ordinarily understood for the purposes of section 5(1)(c) which states that the object of the Act is to cater for the requirements of consumers for liquor and related services, with regard to the proper development of the liquor industry, the tourism industry and other hospitality industries in the State.

Liquorland argued that consumers’ local packaged liquor requirements are not reasonably met by the liquor stores located outside of the Karrinyup Shopping Centre as they are not located at the Centre and therefore are not able to provide efficient one-stop shopping or competition.

The Liquor Commission was not prepared to limit the “locality” to the Karrinyup Shopping Centre and noted that the main trade area from which the shopping centre attracts its customers is at least the area within a 2 km radius of the shopping centre and, as such, it is reasonable to expect that some of those consumers may have their packaged liquor requirements met by other stores in the locality outside of the shopping centre.

The Liquor Commission did not find that travelling up to 2 km to an alternative liquor store which holds a substantially similar type and range of product “constituted a great difficulty or inconvenience” to consumers who live in the locality.

When considering what the actual evidence of consumer requirement for packaged liquor was, the Liquor Commission criticised the survey evidence relied on by Liquorland and said that a mere statement of increased numbers or that some customers would attend the proposed store is not enough to satisfy the test in section 36B(4).

The Commission said that it would be helpful for an applicant to present evidence in respect to, and undertake an analysis of, the following:

(a) the anticipated increase in shoppers for the centre;

(b) the current and proposed proportion of shoppers likely to purchase packaged alcohol at the centre;

(c) the manner in which the proposed food precinct development would attract destination consumers that were more likely to purchase packaged alcohol;

(d) the actual manner in which the existing BWS liquor store is not reasonably able to meet consumer requirements, that is, lack of stock floorspace, storage limitations, crowding and waiting times etc. ; and

(e) trading figures and commercial analysis relating to Coles Liquorland stores that may operate in similar centres that would allow the Commission to come to the conclusion that one liquor store is not able to meet consumer demand in similar centres.

On the basis of the evidence supplied, the Commission could not make a finding that there is existing undue difficulty or inconvenience to consumers in obtaining packaged liquor from the existing packaged liquor outlets in the locality or that the existing packaged liquor stores in the locality cannot reasonably meet consumer requirements.

Conclusion

An applicant for the grant of the new liquor store licence must provide evidence that satisfies the licensing authority that the existing packaged liquor stores cannot reasonably meet consumer requirements for packaged liquor in that locality.

The evidence must be relevant, reliable and logically probative to assist the decision-maker in assessing the probability of the existence of the facts asserted in the application.

Unless the evidence provided by an applicant sufficiently supports a finding that the local packaged liquor requirements cannot reasonably be met by existing packaged liquor premises in the locality, the licensing authority will refuse the application.

It is understood that there are several liquor store applications on hold pending the outcome of the Liquorland appeal. It will be interesting to see how the Supreme Court interprets the new test in section 36B(4).

 

[1]  LC 07/2021

[2] Liquorland (Australia) Pty Ltd v Director of Liquor Licensing [2021] WASC 221

 

This article was written by Ashley Wilson,

Legal Practice Director

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