Woolworths misses out an NZ Liquorland acquisition

Posted by Daniel Palmer on 31st October 2008

Woolworths, Australia’s largest supermarket operator, has fallen short in their attempts to purchase Liquorland in New Zealand, with the liquor chain going to major NZ rival Foodstuffs.

“After several approaches from interested parties, DB Breweries, who felt that off-premise retailing was no longer core to their business, selected Foodstuffs as their preferred bidder after a competitive bidding process, believing the New Zealand owned company the most suitable to own, support and grow the nationwide liquor chain of 70 stores,” a statement from Foodstuffs reported.

It was widely believed that Woolworths were the favourites to purchase Liquorland, with suggestions they may have wanted to turn the larger Liquorland stores into Dan Murphy’s outlets and the smaller ones into BWS (Beer Wine Spirits) stores. Woolworths CEO Michael Luscombe has previously advised that in the long term Woolworths are wanting to have the “same portfolio approach” in New Zealand as they have here in Australia.

Both Foodstuffs and Woolworths, which have a stranglehold on the grocery sector in New Zealand, have been seeking to expand their alcohol operations as, while both can already sell beer and wine, they have struggled to enter the lucrative spirits sector.

The purchase is a logical extension of what Foodstuffs already excels at, according to Foodstuffs NZ Managing Director Tony Carter. “Supporting independently owned and operated businesses is what we do best,” he claimed. “We think it’s a great fit for both the Liquorland brand and our future growth strategy.”

DB Breweries Managing Director Brian Blake noted that a sale wasn’t a necessity, as they were prepared to wait for the most suitable partner. “Liquorland has been a profitable and important part of our portfolio over the years, and, as the business wasn’t for sale as such it was critical to us that we found the right partner to ensure Liquorland – both the business, and the people – would be in good hands,” he said.

The change of ownership is effective today (31 October 2008).