Australia: Coopers Brewery says its shelf and floor space increasingly cut back by liquor retailing giants

The managing director of Australia’s third largest beer group, Coopers Brewery, says his company is having its shelf and floor space for packaged beer increasingly cut back by liquor retailing giants Endeavour Group and Coles, AFR reported on July 25.

Tim Cooper accused the big two retail players of favouring the two large beer companies in Australia, Lion and Asahi Group, which acquired Carlton & United Breweries for $16 billion in 2020, giving it ownership of beer brands Victoria Bitter, Carlton Draught and Crown Lager.

Dr Cooper also said private label beer brands owned by Endeavour and Coles were getting preferential treatment on the shelves of liquor stores they own.

Dr Cooper said the situation had worsened with hotel acquisitions by Endeavour Group, as previously independent bottle shops were converted to the BWS brand operated by Endeavour.

He said Endeavour had bought four pubs in South Australia in the past year and had converted the bottle shops to BWS. Coopers shelf space had dropped by 50 per cent at those outlets, he said.

Endeavour operates 264 Dan Murphy’s outlets and 1437 BWS stores in its retail division and it also runs 353 pubs. Dr Cooper said Coopers Brewery’s market share of packaged beer sales in independent liquor stores in Australia was 7 to 8 per cent, but at the two large retail operators of Endeavour and Coles, it was about 4 per cent.

“Our understanding is that CUB and Lion have negotiated more favourable selling arrangements with Endeavour and Coles,” he said.

A spokesman for Endeavour said: “We won’t comment on commercial terms with majors like Coopers, but we proudly have dedicated shelf space for genuine small producers who are constantly innovating to meet changing customer tastes.“

The spokesman also said Endeavour had made 14-day payment terms permanent after introducing them during the COVID-19 pandemic because the company knew that “cash flow is vital for small producers”.

Comment has been sought from Coles.

Dr Cooper was giving evidence to a federal parliamentary committee on the economy on Tuesday via a video link from his office in Adelaide. Coopers has been operating for 161 years and has about 180 shareholders, most of them part of the extended Cooper family.

He said hefty excise increases on beer imposed twice yearly by the federal government were hurting the beer industry as cost-of-living pressures increased. “The price of a pint is now out of the reach of many,” he said. The excise increases are in line with the CPI measure, and so the hike in February was a larger than usual 3.7 per cent.

Dr Cooper said Coopers Brewery had an estimated national market share of about 5 per cent. Concentration in the retail sector was making it hard to make further inroads, while rebates for prime spots for tap beer in pubs entered into by Lion and Asahi under long-term exclusivity arrangements in the eastern states in particular meant Coopers keg volumes were under pressure.

He said Endeavour and Coles outlets represented about 60 per cent of the packaged beer market.

Endeavour listed on the ASX in July 2021 after being split from supermarket giant Woolworths.

25 July, 2023