Retailers Coles and Woolies start another booze price war

Let’s hope SABMiller know what they are getting themselves in. The country’s major retailers Coles and Woolworths are locked in a discount liquor price war as the festive season approaches. With prices cut by up to 31 percent at its Liquorland and 1st Choice chain of stores, Coles declared a "war on liquor prices" on 16 November 2011. That was not long before Woolworths countered by saying that prices in its Dan Murphy stores would always be lower.

Market observers say it will be interesting to see SABMiller’s reaction to discounting practices in due course. Foster’s tried to stop the price wars earlier this year by refusing to supply the chains with its beer ...after it had heard of a plan to sell them for AUD 28 (USD 28) a carton (24 bottles), well below cost.

Did Foster’s last minute action make any impact? Alas, no.

Examples given for recent beer prices:

Corona: AUD 52 per carton (Coles) – AUD 41.90 (Murphy’s);

Boags Premium: AUD 49 (Coles) – AUD 37.90 (Murphy’s).

A Coles spokesman said liquor prices would be staying down during the run-up to Christmas in line with its popular "Down Down’’ marketing campaign.

An unapologetic Woolworths Liquor chief Steve Greentree was quoted as saying: "If the latest round of price discounting is bad news for the industry’s smaller players, don’t blame us."

In a different slant, Liquorland and 1st Choice stores offered a free pair of men’s briefs (i.e. underwear) with each carton of Carlton Dry beer (Foster’s) on 18 November. How much madder can it get, everybody wonders?

The latest salvo in the supermarket wars comes as both companies chase volume and as independent liquor retailers continue to be squeezed in the market.

Woolworths controls about 31 percent of the liquor market while Coles has about a 21 percent share, the rest comprising independents, according to market research firm IBISWorld.