Liquor retailers up in arms on beer pallets

By DITA DE BONI

Retail liquor merchants are hopping mad over changes to the way they get their beer delivered.

Breweries have scrapped the old ABC (Associated Bottling Company) beer-pallet system, in favour of Chep [New Zealand] pallets to satisfy supermarket stock delivery requirements.

The move has angered liquor merchants, many who say their margins have already been hammered by supermarket beer sales and that they cannot afford the cost of reconfiguring their equipment to cope with the new, different shaped pallets.

There is also a big pricing difference between the old and new style of pallets.

ABC, jointly owned by the main New Zealand breweries, has been renting pallets to beer retailers and wholesalers for 30 years. The cost of hiring the ABC ones last year was a one-off, refundable payment of $25.

Chep - supplier of supermarket-grade bulk-load pallets for most food and beverage stocks - does not allow breweries to hold pallet pools for their outlets and each retailer must pay hirage charges that accrue daily.

They must set up individual accounts with Chep and after having their pallet reserves assessed, pay for the hirage of them even if they are misplaced or stolen.

Liquor merchants who have close ties with the main breweries did not want their names used when contacted, but said there was an industry-wide feeling that breweries were increasingly turning their backs on the smaller retailers in favour of supermarkets.

One merchant said the cost of renting 35 pallets a year - which he had worked out to be $700 - made the prospect of setting up an account with Chep untenable.

"Many retailers have been unofficially stockpiling pallets before they are forced to open an account with Chep ... The whole system is a shambles," he said.

Another Auckland liquor outlet owner said a black market in pallets had developed and that Chep was billing for far more than were in circulation because of an "inflexible" assessment system.

Retailers said the different dimensions of Chep pallets created difficulties.

While supermarkets take smaller, lighter loads of beer - more commonly stubbies and cans - the larger amounts supplied to retailers cannot fit as easily on the Chep product.

One retailer said the amount of accidents from unstable loads on the new pallets was unbelievable.

Chep declined to comment on the industry discontent, but breweries admitted there had been difficulties.

Peter Kean, of Lion Breweries, said the cost of adjusting the ABC production line to make a different sized pallet would have made the company "unprofitable" and it had explained to retailers about the changes in advance.

"This whole thing was inevitable, it was always going to happen," he said.

Mr Kean said discussions had been held with retailers and most understood changes were needed, although several Super Liquor chain heads contacted said they had been told only three to five weeks before the changeover.

Alan Gourdie, of DB Breweries, took a more conciliatory approach, saying he could understand the concerns of retailers but that the company had "explored every option and ultimately there was only one solution."

He said DB had spent hundreds of thousands of dollars in configuring their handling equipment for the new pallets.