The Grocery Retailers' Association describes a Government move to stop alcohol being sold in dairy and grocery stores as "unfair".
A proposed Government bill would see shops smaller than 150 square metres lose the right to sell alcohol.
Association executive director Trina Snow says small stores which sell alcohol are being unfairly blamed for a rise in violent crime.
The bill follows the fatal shooting of a South Auckland liquor store owner, Navtej Singh.
Ms Snow says the association will make strong submissions on behalf of its members, if the bill reaches the select committee stage.
The association says alcohol can make up as much as 25% of sales at some dairies.
The bill would also give more power to councils to decide how alcohol is sold in their areas.
A Manukau City Council member says the Government must be careful it does not give supermarkets a monopoly. Cr Daniel Newman says supermarkets could easily fill the void if liquor is removed from small outlets.