Aldi has had an alcohol sales application rejected in Australia

Aldi has had an alcohol sales application rejected in Australia

Aldi's plans to expand alcohol sales capabilities to more of its Australian stores have been curtailed by regulators in the state of Western Australia.

Earlier this month, the retailer had an application to sell liquor at its new Harrisdale supermarket rejected by WA's director of liquor licencing, on grounds including that its products were too cheap.

"A large percentage of Aldi liquor products are at the lower end of the price scale," said Peter Minchin, delegate of the director of liquor licencing. "Twenty-two wine varieties are listed at a price below AUD5.00 (US$3.75) a bottle, with three priced at AUD2.79 and 48% of wine products are priced at less than AUD10.00 a bottle."

Minchin said this pricing poses a greater risk of alcohol-related harm to that of a concurrent proposal by Australia's largest liquor retailer, Endeavour Drinks Group (formerly Woolworths), to open a stand-alone beer, spirits and wine store in the same shopping centre.

"Although there is a degree of segregation between the liquor area and grocery items in the Aldi store," he added, "the Aldi proposal does introduce a greater level of integration of alcohol within general grocery items." Minchin has granted the Endeavour application.

In an earlier decision, Minchin granted Aldi its first WA liquor licence for its Butler supermarket in outer Perth, but only on conditions including that a dedicated manager is assigned to the licensed area at all times, and that all liquor store purchases be entirely segregated from those in the grocery area.

The tough restrictions may be unsustainable for Aldi's model in WA, if it is able to get additional liquor licences at all in the state, which has one of the country's toughest regulatory regimes for alcohol.

According to Aldi's website, liquor is currently available in 264 of its Australian stores out of a total network of 414 stores.

Aldi began trading in Western Australia on 8 June and has announced plans to open 70 stores in the state in the coming years. It also operates in the region of 50 stores in South Australia. Earlier this year, the retailer closed its online alcohol store in the country, in order "to focus on creating the best possible in-store experience for customers".