Why Costco won't be selling booze from its Auckland mega-store

Thursday, 15 September 2022

Costco is a major retailer of liquor in its North American stores, and also in its store in Perth, Australia (shown above).

Grocery giant Costco won’t be selling booze from its Auckland store when it opens on September 28.

Would-be customers have been lining up to buy Costco membership cards for $60, which will give them the right to shop at the megastore in the west of Auckland.

But, although Costco sells alcoholic drinks in its huge stores overseas, it will not in New Zealand. Negotiations with The Trusts, which licence alcohol sales in west Auckland, came to nothing.

Trusts chief executive Allan Pollard said: “They won’t be selling liquor. We have a really good relationship with Costco. We did try to make it work.

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“We just couldn’t align for one reason, or another,” he said.

The Trusts were established in the 1970s as a community initiative to control the sale of alcohol in west Auckland, and operate 25 liquor stores there.

But local campaigners say that means households paying 15% to 25% more for their beer and wine, compared with buying it at a Pak ‘n Save elsewhere in Auckland.

Pollard said the negotiations fell over because of a difference in business models, with The Trusts wanting to open a liquor outlet within Costco’s giant warehouse store.

That would have been similar to The Trusts store inside the Mount Albert Pak ‘n Save, he said.

But Pollard said Costco didn’t tend to partner with exterior parties.

The Trusts now planned to open a liquor store across the road from Costco, he said.

“We will have a retail store within 12-18 months,” Pollard said.

Costco has been approached for comment.

Nick Smale, spokesperson from the West Auckland Licencing Trusts Action Group (WALTAG), has been campaigning for several years to trigger a west Auckland referendum to strip The Trusts of their monopoly.

Te Atatu resident Nick Smale campaigned for an end to The Trusts’ monopoly on alcohol sales in west Auckland.

A referendum is triggered if 15% of electors in the licencing trust area put their name to a petition to The Trusts.

In September last year, WALTAG celebrated after handing a petition to The Trusts with 17,000 signatures calling for an end to The Trusts’ monopoly in the Waitakere Licencing Trust, one of the two licencing trust areas that make up The Trusts.

Costco has its own-branded range of alcoholic drinks.

Costco’s store is in the Waitakere Licencing Trust.

But, Smale said, the petition was 932 signatures short, the result of people who signed it having moved out of the area, or who had recently moved in, but failed to have their electoral address updated.

Unfortunately, Smale said: “You can’t top it up.”

To trigger a referendum now would require starting a new petition from scratch, although Smale, and other campaigners are standing for seats on the boards of the two west Auckland licencing trusts.

If they won enough seats they might be able to trigger a referendum, he said.

Costco sells its own Kirkland Signature liquor lines in North America, and it may be that even though it can’t stock them on the shelves of its Auckland store, they could be available online.

Smale said even though Countdown could not sell alcohol through its west Auckland store, it did deliver beer and wine to households which ordered online.

These sales were booked through a Countdown store outside The Trusts’ area, he said, and Costco could do the same, but it would need a licenced premises outside The Trusts areas to do it.

Overseas, Costco has developed an e-commerce operation delivering goods to households.

Pollard said that The Trusts already had to “meet the market” on price, as people living in the west of the city could easily drive to other parts of the city to buy alcoholic drinks.