Foodstuffs admits not one, but three of its Pak'nSave supermarkets were offloading short-dated beer – some at prices the Government calls 'irresponsible'. Jonathan Milne reports.
Wellington's biggest supermarket, which previously had its liquor licence suspended for selling to 16-year-olds, is embroiled in a new dispute over selling heavily discounted alcohol.
Last time, the Pak'nSave checkout operator who sold to under-age drinkers was sacked – but now it's the owner who faces scrutiny.
Dean Galt, who represented New Zealand in badminton at the 1992 Barcelona Olympics, is the son of Brian Galt who has a property and retail empire. He bought Pak'nSave Kilbirnie from his father in 2010 – an investment that propelled both Brian and Dean Galt into the NBR Rich List 2019 with a joint wealth of an estimated $75 million. Brian Galt remains a director of the company.
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Pak'nSave Kilbirnie sponsors the Netball Wellington Centre. And, through the Eastern Suburbs Sports Trust, Galt and Pak'nSave link with the likes of Lion Breweries to support amateur sport in the area. They've sponsored athletes like Olympic swimmer Lewis Clareburt and middle-distance runner Kirstie Rae.
But despite his support for community sport, Galt has also had a torrid relationship with the community over his alcohol sales.
As well as having his liquor licence suspended in 2015, he went head-to-head with Police and the Regional Medical Officer of Health in the district licensing authority. They wanted to cut back the hours that the supermarket could sell alcohol, saying its owners needed to take responsibility for problems with alcohol-related harm in central Kilbirnie.
Galt objected, successfully*: "It's about convenience," he said at the time. "If we don't offer the customers what they want, they will go elsewhere for the whole shop."
This week, 'offering customers what they want' means selling them six-packs of Hollandia Premium lager for $6.99 – barely half the regular price of $12.99. The Sale and Supply of Alcohol Act prohibits retailers from advertising discounts of more than 25 percent off the usual price.
It comes after Newsroom revealed Pak'nSave New Plymouth was selling the same product last week for $3.99, which works out at 67c a bottle. Associate Justice Minister Aupito William Sio told Newsroom that selling a six-pack of alcohol cheaper than a six-pack of water in a socially deprived area was "simply irresponsible" on the part of any retailer. "We have to always consider the social impact and implications of this sort of targeted and aggressive alcohol marketing and promotion."
Despite operating these large retail businesses, neither the New Plymouth owners Peter and Deb Melody, nor Dean Galt, would comment. Both refused to answer questions, and hung up when asked about their responsibility for alcohol sales. Galt refused to even acknowledge he owned the Kilbirnie supermarket. "No comment," he repeated.
"As soon as Foodstuffs became aware of the short-dated product being sold for an incorrect price at Pak’nSave New Plymouth and Pak’nSave Kilbirnie, we took fast action and the in-store and online price was corrected to $12.99 or the product removed from sale." – Emma Wooster, Foodstuffs
Foodstuffs spokesperson Emma Wooster said the co-operative was committed to the safe and responsible sale and supply of alcohol at its stores.
"The product is short-dated, which has contributed to the in-store price being set lower than it should have been," she acknowledged. "We’ve now identified three stores in total that have been selling this short-dated product.
"As soon as Foodstuffs became aware of the short-dated product being sold for an incorrect price at Pak’nSave New Plymouth and Pak’nSave Kilbirnie, we took fast action and the in-store and online price was corrected to $12.99 or the product removed from sale."
Nathan Cowie, a spokesperson for Communities Against Alcohol Harm, said the discount was highly problematic considering the persistently high costs of alcohol harm in New Zealand's communities. "It’s disappointing to see our supermarket sector again selling our country’s most harmful drug at pocket money prices."
"All we're trying to do is provide the cheapest bloody groceries to our community. I care about the community, I've lived here for 46 years. I'm not going to rip off my community, we try and give back what we can, whenever we can.” – Dean Galt, July 2022
Section 237 of the Sale and Supply of Alcohol Act 2012 bans any discount exceeding 25 percent below the ordinary price being advertised outside of the premises where it is sold. The Pak'nSave supermarkets both advertised the heavily-discounted prices on the Pak'nSave online shopping website – whether that constitutes external advertising has not yet been tested.
"However, if these deep discounts are causing alcohol to be sold at very low prices as we have seen reported in New Plymouth and Kilbirnie, there may be an offence committed, if alcohol is available so cheaply that it is encouraging or likely to encourage people to consume alcohol to an excessive extent," Cowie said.
It was young drinkers, heavy drinkers, and dependent drinkers who were most sensitive to price, he added. "Our communities are struggling with the constant availability of ultra cheap alcohol."
The Government has begun a review of the Sale and Supply of Alcohol Act, with a view to cracking down on irresponsible sales and marketing. That includes looking at price measures.
"Ultimately it is up to our leadership to decide whether they want to listen to the voice of communities and effectively address alcohol harm with solid evidence-based public health policies, or have they already been swayed by the deep influence of the alcohol lobby to take the most effective public health measures off the table?" – Nathan Cowie, Communities Against Alcohol Harm
Cowie argued for minimum unit pricing, as in Ireland, Scotland, Wales, and Australia's Northern Territory. The Australian floor price works out at NZ$1.42 per unit. At that level, the minimum legal price to sell the Hollandia six-pack (which contained 7.2 standard drinks) would be $10.22.
He said: "Ultimately it is up to our leadership to decide whether they want to listen to the voice of communities and effectively address alcohol harm with solid evidence-based public health policies, or have they already been swayed by the deep influence of the alcohol lobby to take the most effective public health measures off the table?"
Dean Galt spoke to Stuff last year. He complained that the level of scrutiny on the industry was taking its toll.
"All we're trying to do is provide the cheapest bloody groceries to our community," he said. "I care about the community, I've lived here for 46 years.
"I'm not going to rip off my community, we try and give back what we can, whenever we can.”
Supermarket owners were stuck fronting up in a situation where everyone’s costs were going up, he said.
"Every supplier that we deal with is giving us price increases of 10 percent, 20 percent, 30 percent. And we're getting blamed for it all when it's their cost of wages, it's their labour, power, fuel, that's pushing all the prices of the groceries that we on-sell.
"We're not making excess margins, if anything our margins are dropping because all our costs are going up as well."
* Correction: A previous version of this article said Dean Galt had objected unsuccessfully to a decision made by the Wellington District Licensing Committee to cut the supermarket’s licence hours. In fact, Galt won his appeal then reduced the licensing hours as Police had sought, to align them with all supermarkets in the area 12 months later.
