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CHOICE warns combining liquor and grocery shopping is costly

If you’ve just done the supermarket shop for your dinner party and decide to drop into the nearby bottle shop for wine, you could pay dearly for the convenience, according to a survey just released by CHOICE.

CHOICE conducted a price comparison across 11 bottle shops, including the big six liquor retailers owned by the Woolworths and Coles chains.

Woolworths, the country’s largest bottle shop, operates BWS, Dan Murphy’s and Woolworths Liquor, while Coles operates Liquorland, Vintage Cellars and 1st Choice Liquor.

"The two supermarket chains have segmented the market so they can sell alcohol in a way that appeals to different consumers. That may be well and good for marketing a store image, but it can mean the consumer ends up paying as much as 50% more for the exact same beverage," says Christopher Zinn, CHOICE spokesperson.

"In one of the more dramatic examples, VB cost 40% more in Woolworths Liquor than in Dan Murphy’s – even though both of these retailers are owned by the same supermarket chain. Woolworths Liquor outlets are usually situated adjacent to their supermarkets so the cost of convenience can be an expensive one," says Mr Zinn.

"Because of the fierce competition in Australia’s liquor market and the current domestic wine glut, consumers can bag a bargain if they are prepared to shop around and compare prices."

Of concern to CHOICE, however, is the practice of major alcohol retailers selling popular products below cost as 'loss leaders'. When below-cost selling occurs in a fairly concentrated market, the fear is that once the competition is squeezed out, major players will recoup lost revenue through higher prices.

CHOICE found that retail prices for beer were commonly below trade wholesale prices, particularly at the 'big box' superstores.

It’s not just beer drinkers that can make big savings. Those with champagne tastes can also benefit from a little sleuthing. CHOICE found that the same bottle of Moet could vary in price from $52.50 to $87. When breaking open a bottle for a special occasion, a $34 saving would give you much more to celebrate!

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Bottleshop prices

Australia's liquor market is dominated by Coles and Woolies, demolishing competition and squeezing out the smaller players.

31 May 2010 | See our CHOICE price comparison of wine, beer and spirit prices at a number of different outlets.

 
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