Legal action over Woolies NT grog shop

One of Australia's largest Indigenous medical groups has launched legal action over Woolworths' plan for a Dan Murphy's megastore in Darwin.

Danila Dilba Health Service filed the case in the Northern Territory Supreme Court challenging the NT government's decision to approve the bottle shop.

It wants the liquor licence quashed and has named the NT Director of Liquor Licensing and Woolworths Group as the defendants to the action.

The risks and benefits of the new store - which will be the largest in the NT - have not been adequately assessed, Danila Dilba chief executive Olga Havnen said on Friday.

"There's no harm caused to the community by taking the time to properly consider the public interest and community impact of the proposal," she said.

"But there is a lot of potential harm in a rushed process that neglects the public health impact."

Ms Havnen said Darwin was already "awash with takeaway liquor".

"We don't need another store, especially one located so close to three dry Aboriginal communities," she said.

Dozens of health and community organisations have repeatedly criticised the plan to build the bottle shop, saying it will be devastating for the communities.

They have also panned Endeavour Group - which is owned by Woolworths Group - over its community consultation, alleging it was inadequate.

Woolworth's application to build the bottle shop was approved in December by the NT's Director of Liquor Licensing on the proviso the store closed by 9pm.

Customers will also have to identify where they intend to consume the alcohol they propose to purchase.

The director said at the time that Endeavour Group had consulted with Indigenous groups.

Danila Dilba's legal team said the decision to green-light the store was flawed because it was infected with legal error.

It wants the court to consider whether there was a failure to consider key evidence - including community views - and whether it was even open to the Liquor Licensing director to make the decision.

The store was approved after the NT Independent Liquor Commission rejected Endeavour Group's application in September last year.

The territory government then passed legislation in November to fast-track some bottle shop applications, including Woolworths.

A day before the application was approved in December, the food giant announced it had commissioned an independent panel review of its plans.

It said the panel would review health concerns, stakeholder engagement and the processes behind it.

"We acknowledge that there are some in the community that feel they have not been adequately consulted regarding the proposed store," Woolworths Group chairman Gordon Cairns said at the time.

"The IPR will provide a further opportunity for them and other stakeholders with a legitimate interest in the development to express their views."

Woolworths on Friday said no work would commence before the panel was complete.

It declined to comment further saying it would be inappropriate as the matter was before a court.

Endeavour Group has previously also agreed to move the proposed bottle store 1.3km further away from the Indigenous communities.

The IPR is expected to hand down its report in April.

The NT Government has been contacted for comment.