CUB’s eBay venture riles retailers

16 January, 2019 by Andy Young

Carlton & United Breweries is selling direct to consumers, as part of a “trial” conducted by ZX Ventures on the auction and e-commerce website eBay.

ZX Ventures is the global growth and innovation division within the AB Inbev group, which owns CUB; ZX was also the company behind the purchase of online retailer BoozeBud last year.

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Speaking about the move to sell CUB products on eBay, Lance Eerhard, ZX Venture’s Head of eCommerce, Asia Pacific South, told TheShout: “ZX Ventures has been selling a limited range of CUB products on eBay since November last year.

“This is a trial and ZX is continuing to assess the response from consumers.

“Australian businesses are increasingly looking to sell their products through fast-growing digital retailers such as eBay. CUB produces some of Australia’s most popular beers so it makes sense to explore whether eBay is an effective way to get these products into the market.”

However TheShout has spoken with a number of retailers about the move and no-one was happy, saying this was not in the best interests of the retail trades.

One retailer who TheShout spoke anonymously said: “Suppliers selling direct to consumers is not new, however CUB’s approach with BoozeBud and now EBAY is a further challenge for retailers.

“Retailers have long worked with suppliers to support their brand image and health, however taking a route to market where pricing differs from their price vision within retail market along with direct marketing to retail customers raises concerns and impacts confidence working with the suppliers products.”

TheShout has looked through many of the products available via CUB’s eBay store and seen Corona Extra, Carlton Draught and Victoria Bitter listed for $56 per case, however there is a 20 per cent discount promotion available so these products can be bought for $44.80 with free delivery. Crown Lager costs $44 and Carlton Dry can be bought for $43.20.

With these prices, cheaper than any retailer TheShout spoke to, many questioned the validity of this as a trial for CUB, as the price does not reflect what consumers can normally buy the beers for.

One retailer said: “If you are running a trial on a level playing field then of course you can take some analysis out of the sales. But when you are below cost how do you get a read on that? People have only bought from you because you are so cheap. It makes me wonder what is their strategy? They appear to be deadset going after the consumer and trying to blow our cost.”

Retailer Mal Higgs told TheShout that given many of the changes being seen across the beer market at the moment, he would have thought companies like CUB would be looking to make friends with retailers rather than taking them on in this way.

“I’m gobsmacked that CUB would be aggressively pursuing a direct to consumer approach in an environment where I would have thought they would be looking for our support given the interest shown by our customers in craft beer and them wanting us to stock more and more craft beers.”

Higgs said that this approach has been seen before in Australia, most notably when Moët Hennessy moved into online retailing in 2014, he added that a large number of retailers stopped ranging a number of their products and as soon as the company was able to get out of the venture they did.

While there are obviously conditions around the Retail Trades Act, many retailers have indicated to TheShout that this move by CUB will make them seriously consider their position when it comes to ranging CUB products and the purchasing decisions they make.

TheShout also spoke to eBay to understand the licensing arrangements and how it is ensured that no minors are able to buy alcohol via the website, and what the situation is regarding the minimum unit pricing policy currently in place in the Northern Territory.

A spokesperson for eBay told TheShout: “You must be 18 years and over to create an eBay account.

“As per Australian liquor licensing laws, any retailer who sells alcohol on eBay is required to hold and display the relevant license for each listing and jurisdiction it operates in/to.

“When it comes to the Northern Territory and the minimum unit pricing on alcohol sales, eBay has the ability to block these ‘dry areas’ upon check-out but as we are a platform and don’t hold stock, the responsibility lies with the seller.”