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It’s a tempting choice. The giant liquer stores with cheap prices undercutting the smaller guys. I’ll admit that I’ve bought more than my fair share of wine from Dan Murphy’s, a company owned by the Woolworth’s supermarket chain (as is BWS).
The competition regulator, the ACCC, took Woolworths to court over anticompetitive behaviour. Basically Woolies was using it’s muscle to keep smaller retailers out of business.
This is the ACCC’s release:
“Justice Allsop of the Federal Court … found that Woolworths contravened the exclusionary (primary boycott) provisions of the Trade Practices Act 1974 in respect of its dealings with the Ettamogah Hotel at Campbelltown and Global Beer at Tweed Heads.
He also found that Woolworths had contravened the Act by entering into deeds with applicants for liquor licences for the purpose of substantially lessening competition in packaged liquor markets in the geographic areas of Campbelltown, Tweed Heads and Arncliffe/Rockdale.
The matter returns to the court on Monday (3 July 2006) to consider arguments as to the confidentiality of some parts of the judgment. A hearing with respect to penalty is pending.”
I guess it’s time for us all to take our business elsewhere, which probably means I’ll be buying better more expensive wine rather than the cheap mass produced variety.
Some background from the ACCC:
“On 30 June 2003, the ACCC instituted legal proceedings in the Federal Court against Woolworths Limited and Liquorland (Australia) Pty Ltd, a subsidiary of Coles Myer Ltd.
The ACCC alleged that the companies’ conduct contravened the exclusionary (primary boycott) provisions of the Trade Practices Act 1974 and was engaged in for the purpose of substantially lessening competition in packaged takeaway liquor markets contrary to the Act.
In May 2005, by consent, the Federal Court ordered Liquorland to pay pecuniary penalties of $4.75 million after the company admitted to five contraventions of the exclusionary (primary boycott) provisions of the Trade Practices Act 1974. Woolworths was not part of that settlement and the case against Woolworths proceeded to a full hearing over 34 days.”
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