Request for Question Clarification by
angy-ga
on
24 Apr 2003 01:29 PDT
Hi, hazza2003 !
The Liquor Merchants Association of Australia have a web site at:
http://www.liquormerchants.org.au
"Each year the LMA commissions a survey into the suppliers'
performance across a range of criteria and against their competition."
An example of the survey fails to open on my computer.
Unfortunately "The complete survey is available on CD for $30,000AUD
plus GST of 10% "
On the off-chance that thirty thousand is a typo. and the price is
three hundred, or even thirty, you might like to click on the email
link given to Ross Burns to make an enquiry.
Otherwise this looks to be an extremely useful site, though much of it
is available to members only.
The New South Wales' based Australian Liquor Marketers is the largest
wide range wholesaler in Australia, and is owned by Metcash Pty Ltd.
Its address is "8 NEWINGTON ROAD SILVERWATER NSW 2128 POSTAL LOCKED
BAG 165 SILVERWATER NSW 2128 PHONE: (02) 9202 4222 FAX: (02) 9202
4290. " and its website is:
http://www.almqld.aust.com/ab_history.htm
There is also a Queensland address. It buys and distributes wine to
liquor outlets.
"Australian Liquor Marketers distributes product to hotels, liquor
stores, clubs and restaurants the length and breadth of Australia and
provides an essential and economic service, ensuring that all outlets,
regardless of size, are adequately serviced."
As such they are likely to be the largest buyer in New South Wales,
but I have not been able to verify any figures.
Apart from that, I have not been able to track down the information in
the form that you require, partly because phone enquiries met with the
response that "that's confidential information", but here is some
general information on how the industry is currently set up which you
might find of use.
Overall the buying pattern seems to be large chains who buy for
themselves, large distributors, small distributors, wine clubs and
individual retailers, in that order.
I am posting this as a clarification request, so that you can comment,
and another researcher may be able to take over from here. Or if you
are happy with this as an answer I can post it as such at your
request.
Coles Myer and Woolworth's between them are the major players in the
liquor outlet market. They are in a position to bulk buy their wines
at favourable prices for distribution to their various outlets. They
have been pursuing an active policy of acquiring smaller independent
groups and chains, for example:
An article " Coles Myer buys liquor group" by Geoff Hiscock, CNN Asia
Business Editor, Monday, December 16, 2002
discusses Coles Myer's purchase of Theo's at:
http://edition.cnn.com/2002/BUSINESS/asia/12/16/aust.newcoles.biz/
Theo's was then the No. 4 liquor retailer in Australia with 75 stores
in New South Wales and Queensland. The deal covered the 49 liquor
stores and four hotels in New South Wales. It was still under
negotiation in March 2003.
Coles themselves issued a press release about this purchase at:
http://corporate.colesmyer.com.au/shared/CMLPurchaseTheo.pdf.
This makes it clear that the purchase includes the Crown of the Hill
outlets.
Coles Myer already has 526 liquor stores, "under its Liquorland and
Vintage Cellars brands, with about A$1.3 billion ($735 million) in
annual sales, or about 5 percent of the group's A$25.7 billion ($14.4
billion) annual turnover. "
Its major rival is Woolworths with 438 liquor outlets, and between
them they command about 40% of the market. The purchase is subject to
ACCC approval.
Woolworth's trade " under the Dan Murphy's (discounting), BWS, First
Estate (fine wines) and Woolworths Liquor names." according to Leon
Gettler in The Age:
http://www.theage.com.au/articles/2002/12/16/1039656341613.html
They also own the Mac's Liquor outlets. See Euromonitor's 2003
article at:
:
http://www.euromonitor.com/report_summary.asp?docid=9815
This article discusses - among other things - the trend towards
consolidation in detail:
"Retail consolidation
"The retail side of the market is currently undergoing a period of
unprecedented consolidation. The major supermarket chains have
identified the alcoholic drinks industry as an area of growth over the
short to medium term. A licence is required to sell liquor anywhere in
Australia, and in most cases it is difficult to obtain a licence to
set up a new outlet, because an applicant must demonstrate there to be
a need for such an outlet in the place of planned construction.
Frustrated by this situation both Coles and Woolworths have been
aggressively buying smaller chains and even individual outlets.
Both Coles and Woolworths operate stores under several fascias.
Woolworths operates Mac's Liquor, Cheaper Liquor (its discount brand)
and Dan Murphy Cellars (its deep discounter/ superstore concept).
Meanwhile, Coles Myer operates some 422 liquor stores under the
Liquorland (mainstream), Quaffers (discount/superstore) and Vintage
Cellars (upmarket) fascias.
However, consolidation has not been restricted to the two major
players. There is also considerable activity amongst the next tier of
retailers, who are also looking to develop economies of scale, to
enable them to compete more effectively with Coles and Woolworths. One
significant merger, which occurred during 2000, was the amalgamation
of the 106-store Porters Liquor with the 25-store Barmans chain. The
combined group has stated that it plans to increase the number of
outlets, using the Barmans brand, to 300 within two years. This
development was overtaken by further acquisition with Coles
acquisition of ALG in July 2001.
The trend towards consolidation is expected to continue as the liquor
retailing industry offers relatively low margins, and these larger
businesses are greatly advantaged by their economies of scale.
Independent outlets and smaller chains are therefore finding it
increasingly difficult to remain profitable."
However, Porters and Barmans were themselves part of the Australian
Liquor Group, along with Knox and Philip Murphy (183 stores) and ALG
was acquired by Coles in 2001, writes Chris Tolhurst in the Financial
Review:
http://afr.com/specialreports/report3/2001/09/26/FFX26NU5ZRC.html
Chris also quotes a source as saying that the wine clubs account for
5% of the market share.
"Adelaide University academic and wine industry researcher Kym
Anderson says while wine clubs have a small market share, they play a
larger role in the development of new brands and wine styles.
Anderson says wine producers use clubs to test market wines. They will
then alter the labelling and pricing of particular products before
releasing new wines through shop-front outlets.
"The wine clubs serve more of a purpose than just providing that 5 per
cent of sales," he says. "It's a way of getting market intelligence."
"
The Independent Liquor Group, who buy wine wholesale to distribute to
member groups such as Liquorstop and Liquorworld, as well as various
pub groups and wine clubs, held a 12% share of the market in 2002. An
article by Bernadette Denman, of the NSW Registry of Co-operatives can
be found at:
http://datasearch.uts.edu.au/accord/social/profiles/ilg.html
"When this buying group became a co-operative in 1977, it had 30
members who owned 50 retail outlets consisting of liquor stores,
hotels and a small number of restaurants. It began operations with
four staff.
In its first year of trading, ILG realised $1 million in sales, with
assets of around $300,000 and a market share of one per cent.
Today, 25 years on, the co-operative has 600 members who own 650
outlets. The business is operated by 75 staff. In its most recent
financial year, ILG's assets totalled $37.6 million with an annual
turnover of $134 million and a market share of 12 per cent."
Of course I am corelating the retail positioning with the buying
power, but it seems a reasonable assumption.
So you are looking at roughly:
Australian Liquor marketers ???
Coles Myer 20% +
Woolworths 20% +
The Independent Liquor Group 12%
Wine Clubs 5%
Theo's inc. Crown of the Hill (if the sale did not get approval) 4%
Kemeny Brothers of Bondi - refused to give any information, but a not
insignificant small player.
Other individual retailers.
Search terms:
wine retailers New South Wales
wine wholesalers New South Wales
wine retail industry New South Wales
chain of supply wine New South Wales
wine New South Wales market share
liquor outlets New South Wales
