The authority deferred bottleshop applications across NSW late last year following concerns about the potential social impact of heavily discounted alcohol on particular areas.

Despite deferring a decision on eight locations across the Hunter the authority was satisfied with the Aldi Raymond Terrace application. A spokesman for the authority said that, "by law the authority cannot approve a new liquor licence unless it is satisfied that the overall social impact of the proposed outlet will not be detrimental to the well-being of the local or broader community."

However Karen Gillham from the Population Health department of HNEH said that the health department opposed the licence because it believed its introduction would harm the community.

"The local community of Raymond Terrace already experiences high levels of alcohol-related harm due to both acute and chronic excessive consumption of alcohol," she said.

"The density of licensed outlets per 100,000 population in Raymond Terrace is higher than that of NSW (227 compared to 220 for NSW)."

Ms Gillham also raised the possibility of a pricing war between competitors.

"It is well known that [the existing] Dan Murphy's promises the lowest prices, thus the addition of a new outlet may encourage more competitive pricing."

Junction Inn bottle shop owner Andrew Wedmaier described the approval as "frustrating."

"From a business point of view it won't affect us independents as much as Dan Murphy's did [but] the government keeps talking about anti-social behaviour yet they keep knocking in these bottle shops," he said.

Aldi was contacted for this story but were unable to comment, saying only that they would review the authority's findings once more information was made available to them.