Woolworths to buy a brewer?

Independent Liquor, which was founded by the late Michael Erceg in 1987 and was sold to a private equity partnership in 2008 following Mr Erceq’s death in a helicopter crash, is believed to be worth about AUD 700 million (EUR 447 million). This is much less than its two private equity operators paid for it three years ago: the equivalent of EUR 650 million.

The battle for market share between Australia’s duopoly retailers Coles and Woolworths is heating up, and it is becoming harder for either to grow without running into competition issues or legislative problems.

Independent Liquor produces and distributes alcopops, beer, wine and spirits in Australia and New Zealand, including Haagen and Carlsberg.

A source close to Independent Liquor said a tie-up with Woolworths made strategic sense. Not only would it enable Woolworths to increase its house brands, but it would give it access to costings that could be used to get better terms from the bigger suppliers, Foster’s and Lion Nathan.