With yet another high profile Australian brand calling out the anti-competitive behaviour of the major supermarket chains in the packaged alcohol market, the Australasian Association of Convenience Stores (AACS) has called on suppliers to join retailers in increasing pressure on Government to address the absurd imbalance in a category valued at around $17 billion per year.
Wolf Blass is the latest name to challenge the legislated advantages enjoyed by the two major chains which together, through their various store brands and formats, account for a mindboggling 70% of the packaged alcohol market in Australia.
The two chains dominate the available licenses to sell packaged liquor while other small businesses like convenience stores, which are proven responsible retailers, continue to be prevented from selling beer and wine.
“Pressure must not only come from small retailers who are unfairly prevented from participating in this market, but also from the suppliers which find themselves increasingly squeezed out,” said AACS CEO Jeff Rogut.
“Our message to these suppliers is: work with us to increase the pressure on Government to level the playing field in this category and give small businesses a fair go.
“The proliferation of home brand products has diminished the ability of some of Australia’s best known producers of beer and wine to reach their target market. In a deregulated market in which small businesses were permitted to compete with the majors, these suppliers would have an alternate and diversified national channel through which to reach their customer base.
“Unfortunately, and for no credible commercial reason, convenience stores are not permitted to even compete in this space, despite the fact that convenience stores on almost every other continent are allowed to do so in some form.”
The AACS has long argued for deregulation in the packaged alcohol market to enable convenience stores to responsibly sell packaged beer and wine as a means of levelling the playing field with the majors, subject to normal staff training, trading hours and age regulations of course.
Mr Rogut said enabling convenience stores to compete in this category would open up an important new revenue opportunity for these small businesses.
“Based on the contribution of beer and wine sales to convenience store profitability in the US and UK, enabling Australian stores to participate would drive well over $500 million in additional sales per year for our industry as well as new opportunities for suppliers,” Mr Rogut said.
“Consumer purchasing habits when it comes to packaged alcohol align perfectly with the convenience store model. When purchasing packaged alcohol, consumers desire convenience and quick service while being influenced by store display, layout and product.
“These are our core strengths but the legal framework prevents us from using them,” he said.
For further information, please contact:
Chief Executive Officer Australasian Association of Convenience Stores
Ph: 0467 873 789
Ph: (02) 9279 4770