Watchdogs slam cheap liquor promotions

Photo / Richard Robinson

Cheap liquor promotions are hurting the on-licence industry and contributing to New Zealand's drinking problem, alcohol watchdog services say.

In May this year, the two big supermarket chains - Foodstuffs and Progressive Enterprises - said they had stopped selling liquor below cost as a "loss leader".

The move followed comments by the Liquor Licensing Authority that low prices led to higher consumption and abuse of alcohol.

Between them, Foodstuffs and Progressive Enterprises own the New World, Pack 'n Save, Woolworths, Countdown and Foodtown supermarkets.

When asked this month if they had practised loss-leading since May, Progressive Enterprises spokesman Bill Moore said "absolutely not. It is our policy not to sell alcohol below cost price".

He said they Progressive was a "responsible retailer".

"We try to offer our customers a wide range of all products at competitive prices."

Foodstuffs NZ Ltd said it would not promote the sale of alcohol below cost and requested retail franchisees to follow the same policy.

But it said the policy did not prevent clearance sales of "small quantities of obsolete or dated stock which would otherwise be unsaleable".

Progressive's Bill Moore said prices are set by liquor wholesalers.

"Suppliers are responsible for setting their prices. Supermarkets and other retailers add what they consider a reasonable mark-up."

However, chief executive of the Hospitality Association of New Zealand Bruce Robertson said the buying power of the big chains meant they could get a much better price from wholesalers than small retailers.

In some cases, he said, supermarkets offer liquor prices so low they rival wholesalers.

"A lot of smaller chains now buy from supermarkets rather than wholesalers because it is cheaper."

He blamed cheaper prices at supermarkets for a fall in on-licence alcohol consumption.

"There's no doubt that over the last decade there has been a change in habits."

Robertson said 10 years ago, about 40 per cent of alcohol was purchased in bars and restaurants. Supermarkets selling liquor have shifted that level to 30 per cent, he said.

Progressive Enterprises declined to comment on other industries.

Alcohol Healthwatch director Rebecca Williams said although supermarkets are not selling below cost, their cheap prices are still damaging.

"I think they have a lot to answer for.

"What they're not doing is stopping cut-price deals."

One way supermarkets could promote their liquor more responsibly, she said, was to segregate the liquor section to one part of the supermarket where children do not go.

This way, she said, people would be less likely to make impulse purchases of alcohol.

Progressive Enterprises said they do this to a large extent.

"We locate beer and wine, largely, in contained areas in our stores."