Grocery Stores vs Dairies

August 12, 2018 2967

The argument sometimes surfaces that without the licensing trusts, dairies will be allowed to sell booze.

The legislation is pretty clear that dairies can’t be issued with an off-license. But the legislation is equally clear that it is OK to issue an off-license to a grocery store. And that is where there is some confusion. Is a grocery store just a big dairy? How is it decided if a shop is a dairy or a grocery store?

The definitions were made really clear in the Sale & Supply of Alcohol Act 2012. A grocery store is basically a store that looks and smells like a grocery store AND principally sells “food products”.

Whether a store principally sells food products is determined by an analysis of its revenues. Revenues have the GST, tobacco excise and lotto/keno/etc removed and are then split into five categories.

food products
alcohol
tobacco
convenience foods
other

To qualify as grocery store (and therefore be eligible for an off-license) “food products” MUST be the largest category of revenue.

Importantly, “food products” are defined to exclude convenience food. Specific exclusions are:

alcohol
confectionery
ready-to-eat prepared food (e.g. pies, hot chips, sandwiches, pizza)
snack food (e.g. small bags of chips, single serve ice creams)
drinks (in containers of 1L or less)

So in the continuum of stores ranging from corner dairies to supermarkets, grocery stores are the middle ground. Some people may think of them as small supermarkets, others may think of them as big dairies.

What is 100% clear is that the rules are tight. It doesn’t matter if it is called a ‘superette’ or a ‘dairy’. If it is selling more Weetbix and baked beans than meat pies, cans of coke and bags of chips… only then will it be classified as a ‘grocery store’ and considered for an off-license.

NB – supermarkets are defined by their size, and must have a floor area of at least 1000 m²