5pc limit blow for alcopop makers

Photo / Bay of Plenty Times

Independent Liquor Group has been given a serve in liquor law reforms announced yesterday.

The South Auckland-based firm dominates the market for "Ready To Drink" products popular with the young - the segment most directly affected by the changes.

The company, owned by private equity group Pacific Equity Partners, got sobering news with the Government limiting the maximum alcohol in RTDs to just 5 per cent.

Many RTDs are 7 per cent and above. In particular, Independent's bourbon and coke brand Woodstock is a market leader in the RTD market. Its alcohol content is 8 per cent.

The new rules are expected to force Independent to make changes to some of its brands for New Zealand sale. The company's RTDs are also popular in countries such as Australia. There it was hit by tax increases but avoided restrictions on alcohol content.

Independent Liquor would not take calls yesterday.

Independent and other liquor companies will be faced with having to maintain market share for RTDs when their alcohol levels become comparable to some beers.

The company was founded by the late Michael Erceg, and his widow, Lynne, is still a significant shareholder.

In January 2007 eyebrows were raised when Independent was bought by Pacific Equity Partners and Unitas Capital for $1.2 billion.

Other brands include Vodka Ice and Pulse, each with 7 per cent alcohol. William Cody comes in versions of 5, 8 and 10 per cent.

A 1.25-litre self-serve bottle of Big Foot "Bigger is Better" and casks with 11 per cent alcohol are likely to fall foul of the new restrictions limiting RTDs to a maximum of 1.5 serves each.

It is understood that the specific focus on the RTD market came as a surprise.

Lion Nathan said it was still analysing the change and would not comment, but confirmed that it produced RTDs with more than 5 per cent alcohol.

Brands with more than 5 per cent include Gordon's G&T and McKenna & Cola.

DB Breweries chief executive Brian Brake said the company had just 6 per cent of the RTD market and its brands were mostly at the lower end of the alcohol range.