By Amy Looker
Two major independent liquor groups have announced their intention to merge, in a bid to take on Woolworths and Coles’ liquor businesses.
The Independent Liquor Group (ILG) and Southern Independent Liquor (SIL) confirmed that it will merge to form ILG Australia, creating a group of 1600 independent liquor stores throughout NSW, Queensland, Victoria and Tasmania.
ILG chief executive officer, Doug Evans, said Woolworths and Coles had dismissed independents for too long and now the time had come to wage a strategic war against the duopoly.
“For too long, the liquor giants have spoken about us as ‘roadkill’, but we are back,” Evans said. “We intend to reverse the domination of the chains which has crept up on our industry over the last decade.”
The first campaign for ILG Australia will be the launch of the ‘Support your Independent’ campaign, which aims to garner support from consumers for ILG Australia’s banner groups, including the Little Bottler, Super Cellars, and Duncan’s brands.
“‘Support your Independent’ will be a very visual campaign to publicly identify every independent outlet, as well as to deliver measurable benefits to outlets and consumers,” Evans explained.
“If we stand together we can enhance every aspect of our industry. I therefore urge everyone to get behind our campaign and to support us in every way possible.”
SIL managing director, David Stephenson, said the merger will increase the turnover of the group to $340 million, with ILG Australia setting a target of $400 million annual turnover within its sights.
Stephenson added that the merger will have the immediate benefit of increasing its buying power for members, while providing suppliers with more opportunity to influence the direction of their brands.
“Negotiations will be easier for suppliers as they can access 1600 stores with a single contact person, and they will be able to build brands independent of the decisions of the major chains,” Stephenson said at the launch.
“Our members will enjoy the benefits of group buying in terms of price and range which will impact on turnover and competition for customers.”
Evans confirmed that ILG’s sales and marketing manager, Allen de Costa, would take on the role of buying manager for the entire group.
Supplier members of ILG have expressed their approval of the merger, with Warwick Brook, NSW state manager of De Bortoli Wines, a long-time supplier member of ILG, describing the merger as a positive outcome for the industry.
“Whenever we have parts of the industry being pro-active about longevity or survival it is a good sign,” Brook said.
“This is a good step in the right direction and I’m sure it will be embraced by all suppliers of all segments.”
However, the merger has received some criticism from the industry, with one independent liquor retailer questioning if ILG Australia’s focus on its battle with the chains will come at the expense of its consumer offer.
“While anything that strengthens the position of the independents in the market is a good thing, I would have liked to have seen some mention of what this new group is going to be offering consumers,” the retailer told TheShout.
“Coles and Woolworths may be our competitors, but it is our customers who are shopping with us and I am more interested in hearing how this will translate into a better consumer offer
This article first appeared on TheShout.com.au