Aldi plans to sell booze in NSW

The German discount retailer Aldi has been selling liquor in the state of Victoria for seven years, offering about 70 varieties of non-refrigerated beer, wine and ready-to-drink spirits, most of which are Aldi brand products. In March, it was reported, Aldi applied for the right to sell alcohol in its New South Wales (NSW) stores too, which is its latest attempt to disrupt the Woolworths and Coles grocery and liquor duopoly.

The German retailer confirmed that it had applied to sell liquor in all its 102 NSW stores and had begun the licence application process.

A decision as to whether Aldi will sell alcohol in NSW will not be made until the outcome of these applications is known. Aldi plans to open 40 sq metre liquor retail areas in its supermarkets which would be modest operations compared with traditional liquor outlets.

This is regarded as Aldi’s latest foray against the market share of its competitors Coles and Woolworths, which sell about half the AUD 16 billion worth of alcohol purchased in liquor stores nationally.

Woolworths, the more dominant player, owns more than 1200 liquor stores, including brands such as Dan Murphy’s. Its stores collectively generate annual alcohol sales of about AUD 6 billion, media sources say.

The dominance of Woolworths in liquor sales is set to increase after it announced in February 2011 that it planned to buy the direct-market liquor retailer Cellarmasters for AUD 340 million. It is subject to approval by the Australian Competition and Consumer Commission.

Aldi’s strategy of selling predominantly own-brand products follows the lead of its two rivals, which have pushed their own private-label beers, wines and spirits at the expense of branded competitors.

According to estimates, Aldi, which set up shops in Australia ten years ago, has about 5 percent of the national grocery market.