Tuesday, 21 July 2009

Beer and predatory pricing

I hear from some of my old colleagues in the liquor trade (I once had a chain of liquor stores but no longer have any interest in the industry) that up in Queensland some of the independents are gathering information for a very interesting case against the supermarket chains of predatory pricing.

To date the ACCC has been reluctant to really go after Coles and Woolworths, which between them must now have a 50% share of all booze sales, but this time the evidence as told to me is compelling.

When beer is sold by the majors at $3 a case less than the buying price of the biggest independents, something is clearly wrong  — especially when the loss leadering only takes place close to the location where an independent has dared to become competitive in the wine and spirits segments of the market. I am sure we will hear more about this.

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