Woolies launches 100 own brand liquor lines in six months

02 March, 2012 by

By James Atkinson

Woolworths' private label brands are now its liquor division's second largest supplier by value, the retailer said, as it announced group liquor sales for the first half of 2011-12 had increased to $3.6 billion.

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As contract brewer Gage Roads outlined the contribution of Woolworths' private label brands to its growth strategy, the supermarket said it had launched 100 new own brand lines during the half including alcoholic ginger beer, flavoured ciders, rum and premium bourbon.

Woolies said private label volume through Gage Roads had grown by more than 70 per cent over the period, and its first own brand wine lines managed by Dorrien Estate are now available for retail sale.

"We are in the process of transitioning our own brand bottling to our own facilities," the retailer added.

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Woolworths said its liquor business experienced another half of strong growth across all brands, particularly Dan Murphy's and BWS, "gaining further market share despite increased competitor activity around the Christmas period and sell price deflation".

Group liquor sales, including liquor sales on-premise at ALH Group venues, totalled $3.6 billion for the first half, up from $3.2 billion in the corresponding period.

Return on funds employed (ROFE) for the Australian Food and Liquor division was 38.7 per cent, down from 43.1 per cent in the prior year.

"Excluding the impact of our newly acquired Cellarmasters business, ROFE was 41.9 per cent," Woolworths said.

"As we continue to realise further synergies in the Cellarmasters business we expect ROFE to improve."

Australian Food and Liquor sales for the half-year were $19.6 billion, an increase of $0.8 billion or 4.3 per cent on last year.

Comparable store sales in Australian Food and Liquor for the period increased 1.5 per cent, down from the 2.2 per cent growth achieved in the previous corresponding period.

"Sales growth was impacted by significant deflation particularly in produce, seafood, bakery and deli in the second quarter," Woolworths said.

"We continued to invest in price, particularly in the grocery, general merchandise and liquor categories."