New California bill seeks to regulate alcohol sales at self-service checkouts

Fresh & Easy could be hurt by legislation

SAN FRANCISCO — A new bill introduced by a California assemblywoman aims to curb the sale of alcohol to minors by prohibiting sales at self-service checkouts.

Assembly Bill 183, introduced last month by Fiona Ma, D-San Francisco and San Mateo Counties, was passed by the assembly committee. Assemblywoman Ma said that self-service checkouts are susceptible to technological failures, allowing minors to purchase alcohol.

“Underage drinking costs California taxpayers an estimated $8.1 billion annually,” Ma said. “AB 183 seeks to prevent alcohol from getting in the wrong hands and protects the public and our youth. It’s better to be safe than sorry.”

The introduction of this bill is said to affect retailers, particularly Tesco's U.S. operation Fresh & Easy, which utilizes self-service checkouts and sells alcohol in its stores. According to MF Global analyst Mike Dennis, the chain could be hurt by the legislation.

"The bill (is) nicknamed 'Tesco Fresh & Easy Law' because Tesco's Fresh & Easy has 126 stores [out of its 175 total store count] in California, and is the only grocery chain that offers only self-service checkout and not the full-service options that you would get in Stater Bros. or Safeway," Dennis was quoted as saying.

Last month, the retailer disclosed a $300 million loss during the 2010-2011 financial year ended Feb. 26. Despite this, however, Tesco CEO Philip Clarke said expansion plans for Fresh & Easy will be implemented.

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