Small wineries threatened with extinction
With only two corporations, Coles Myer and Woolworths, controlling most of Australia’s bottle shops - i.e. places where you can by alcohol - it is feared that many small wineries will be squeezed out of the industry. At present there are 1318 wineries in Australia, having risen from 990 in just five years.
However, this figure is mildly misleading since four groups
- Foster’s through Beringer Blass, Southcorp, BRL Hardy and Orlando Wyndham - are dominant and are supported by Coles and Woolworths. Small wonder that that their share prices reflect their market dominance.
Comparing share price to company earnings for 2002, Foster’s has the lowest multiple ranging from 16 to 19 times compared with Southcorp and BRL Hardy’s multiples beyond 20..
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