US retail giant Costco is demanding special consideration to be able to sell liquor in one of its South Australian stores.

The bulk-buy retailer has appealed to the state’s Supreme Court for a licence to provide alcohol to customers at its Kilburn outlet.

Costco’s model, which would involve selling alcohol on the same premises as other goods, does not currently comply with SA’s liquor licensing laws.

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But its bid has been opposed by nearby pubs and Woolworths, which owns liquor retailers Dan Murphy’s and BWS.

The Australian Hotels Association is warning such a move — if approved — would set a dangerous precedent and be another stake in the heart of small alcohol retailers and SA wine producers, who are struggling to make a profit, News Corp reported.

Across the country, Costco sells liquor in Victoria, New South Wales and the ACT, but is not allowed to in Queensland.

AHA SA general manager Ian Horne said allowing this to happen would create a dangerous legal precedent which was likely to be exploited by other operators.

“Competition for liquor retailing is extraordinary already and our interest is particularly for trying to preserve a role for independent retailers,” Mr Horne said.