Bottleshop prices

Australia's liquor market is dominated by Coles and Woolies, demolishing competition and squeezing out the smaller players.
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Woolworths and Coles dominate Australia's liquor industry, making it virtually impossible for smaller, independent retailers to compete. Woolworths, the country’s largest bottle shop owner, operates BWS, Dan Murphy’s and Woolworths Liquor. Coles operates Liquorland, Vintage Cellars and 1st Choice Liquor. The buying power of these two giants has undoubtedly driven down prices for consumers, but their sustained below-cost selling is crippling the competition.

“Sometimes we advertise below-cost prices to compete,” admits Andrew Reitzer, Chief Executive of Metcash, which owns Australia’s largest liquor wholesaler and supplies 17,000 licensed outlets. “The two major chains are opening ‘big box’ outlets that murder the competition on price.”

CHOICE looks at the impacts of this aggressive discounting and what it may ultimately mean for consumers. 

Report summary

In this report we:

  • Take a snapshot of prices for popular beer, wine and spirits, to determine where you can find the cheapest deals, In one of the most dramatic examples, VB cost 40% more in Woolworths Liquor than in Dan Murphy’s – even though both are owned by Woolworths. Woolworths Liquor outlets are usually situated adjacent to their supermarkets, so the cost of convenience can be an expensive one 
  • Look at at the state of competition in the industry, and the growing dominance of two supermarkets
  • Ask Dr Craig Emerson, Minister for Competition Policy and Consumer Affairs, whether regulator action is needed to stop anti-competitive practices
  • Find out what independent retailers, winemakers and grape growers think about supermarket dominance
  • Look at how Australia's unprecedented wine glut has led to massive growth in cheap cleanskin wines 

Tune into the CHOICE Radio podcast to hear more about Alan Dooley's investigation into supermarkets' growing dominance of the bottleshop industry.

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