The new CEO of the Australasian Association of Convenience Stores (AACS), Theo Foukkare, has outlined his focuses for the year, one of which is the fight for convenience stores and petrol stations to be able to stock packaged alcoholic products.
Foukkare said the current legislation that does not allow convenience stores to sell alcohol is based on “old and outdated thinking” and is restricting the opportunity of a multitude of small businesses in Australia, especially after the hardships of 2020. COVID restrictions and the resulting changed consumer behaviour of last year have added to significant challenges faced in the convenience industry in recent years, including rising costs driven by tobacco excise increases and high award wages of the convenience and petroleum channel.
“All of the changes in market dynamics have made it really tough for small business,” Foukkare told National Liquor News.
“Based on the US experience in the petrol and convenience channel, we believe that there is a $900 million sales opportunity for small business in the petrol and convenience channels specifically. That is the equivalent to the energy drink category within total beverages across the convenience channel, so it would be a very significant opportunity that would enable our members to stay relevant. This forecast excludes the associated purchases that will come along with that.”
Foukkare also clarified that the AACS stance is not for convenience stores to replicate the range or setup of the off-premise industry. Rather, the goal is for the convenience channel to stock a basic, limited range in a controlled environment where Responsible Service of Alcohol can be maintained and age can be verified.
“The range that we would be looking for is simply six packs of beer or premixes and a basic range of wines… We’re definitely not looking to sell hard liquor, bottles of spirits, hip flasks of spirits, or any drinking accessories, and we’re not looking at cartons of beer or cases of wine,” Foukkare said.
“It would need to be regulated, with the appropriate display location in-store and the appropriate accessibility restrictions in place – that might mean behind the counter, or in the closest refrigerator to the console or customer service area that is lockable outside of certain hours – depending on each of the state guidelines. This would require a modified liquor license, which ultimately means that not anyone could sell it. All convenience store retailers would need to abide by the rules, no different to anyone else selling the product.”
Apart from the opportunity of a new revenue stream for the convenience channel, as well as removing what Foukkare believes is an anti-competitive issue that the ACCC is aware of, one of the biggest drives behind this renewed focus from AACS is around the way in which consumers can purchase alcohol today, and how these methods have been evolving to be more flexible.
Foukkare outlines one example of this is with on-demand alcohol home delivery services, including those that allow alcohol to be delivered with a takeaway meal, and how they have developed in line with regulation in recent years.
“When we have initiatives like that, we see areas that the government or the regulators are actually being flexible… we don’t see why the convenience channel should be any different to these examples,” Foukkare said.
“It’s about giving the customer the choice to buy what they want, when they want, from where they want. And currently, they don’t have that option.”
AACS believes that the convenience channel’s positive track record with age verification in the tobacco sphere more than proves its ability to be able to responsibly sell alcohol, especially on the small and regulated scale that is proposed. This is set to be boosted even further in the near future, thanks to the AACS partnership with its sister association in the United States NACS, which has heavily invested in an age recognition platform. AACS will be looking into how to rollout similar technology in the Australian marketplace.
The renewed focus in this discussion does not mean that convenience stores and petrol stations want to turn themselves into liquor stores, and it also doesn’t mean that the entire convenience channel wants to sell alcohol either.
As Foukkare said: “When you can purchase alcohol via so many different avenues today, our members feel like they’re being restricted, uncompetitive and not being able to provide consumers with legal products that are so easily accessible today. Members feel as though they’ve proven over a long period of time that they can not sell tobacco to minors, so members are frustrated, both from large retailers down to single site operators.
“The convenience store channel does not want to become a specialist liquor retailer. We have no space for it and we don’t have the technical product knowledge, but what we do believe is that we have a role to play in providing consumers with a legal product in an environment that’s more convenient to them.
“It’s not something that I believe independent retailers should be significantly concerned about, I think that they should look at it as effectively providing consumers with access to products that they want to buy at a time or place that’s convenient to them… I don’t believe it’s a threat, we’re talking about two segments of the actual overall alcohol industry.
“Of the 7000 convenience stores that we have, I don’t believe that the entire network will apply for a liquor licence. Firstly, there won’t be the ability to; secondly, they might not be able to fund a liquor licence; thirdly, I don’t believe that the in-store configuration would allow for a significant number of stores to do it. We’re talking somewhere in the vicinity of maybe 2000 – 3000 stores that are selling a limited range of some higher volume lines in a very controlled format, but again we’re going to have restrictions around what consumers can purchase.”
This year AACS will be working on this focus in a number of ways, including with the employment of a full time advocacy staff member who will look to develop and manage relationships with stakeholders across government, suppliers and retailers. AACS will be working closely with major retail members of the convenience channel, while also looking to develop new relationships with those in the liquor industry, and welcomes an open dialogue on the topic of convenience stores and petrol stations selling alcohol.
“From our association’s perspective, packaged alcohol has been discussed for 25 years and the world has changed during that time – accessibility to products, people’s sentiment towards the issue as well as general attitudes towards being more responsible have really come a long way,” Foukkare said.
“I do believe that we need to give consumers choice and we need to protect all small business. Our association is fighting for all small business, not just on packaged alcohol but on a number of other key initiatives as well and we welcome open discussion on the matter.”