DB: supermarket beer sales will harm our profits

By Joe Helm

The profitability of brewing company DB Group, already under pressure from beer price discounting, is likely to be further harmed by the introduction of beer and spirits sales to supermarkets later this year.

In a submission on the Sale of Liquor Amendment Bill No 2 to the Justice and Law Reform Select Committee yesterday, DB managing director Brian Blake said: "Further deregulation will bring more competition into a retail market in which beer consumption is continuing to decline and will place immediate pressure on beer margins ... In the short to medium term this will impact on profitability. However, we support the changes because they are another step towards creating a more normalised drinking environment."

In February Mr Blake warned that discounting meant it would be a big challenge for DB to match September 1998 financial year earnings, before interest and tax, of $40.74 million in the present financial year.

In his submission Mr Blake said there was no logic in the present distinction between wine, already sold in supermarkets, and other beverages such as beer and spirits.

"Treating beer and spirits as a special product to be locked away and kept from adults at certain times of the day or the week is increasingly becoming a thing of the past. Making them available through supermarkets will assist greatly in this process."

Mr Blake said DB supported Sunday trading for all holders of an off-licence. To discriminate would create a significant commercial inequity and would have no justification.

"There is no validity in the claims that this additional availability would lead to increased consumption," he said.

"In fact, consumption is continuing to decline in spite of the wider availability of beer,wine and spirits than ever before.

"Currently sports clubs and chartered clubs are able to trade on Sundays with few of the restrictions encountered by other licensed premises. This is clearly unfair and does nothing to engender respect for the law."

Mr Blake said DB did not favour any particular minimum drinking age but supported the introduction of an evidence-of-age document.

He said the legal drinking age should be decided by members of parliament in consultation with their electorates.