In the words of the great philosopher Homer J Simpson – “to alcohol the cause of and solution to all life’s problems"
Woolworths has separated itself from boozing, likely to bolster the ESG profile. The added benefit is it also means they get out of owning hotels and all the other nasties like poker machines, and other gambling such as Keno and TAB. In Queensland to have a bottle shop, the bottle shop needs to have an associated pub. To facilitate this, Woolworths were one of the largest owners of pubs in the state.
This new brand holds all the familiar outlet brands. Dan’s, BWS, Cellardoors, Jimms plus a few others in over 1500 stores and 300 something pubs. The pubs contain more than 12,000 of the aforementioned pokies.
Despite being chucked out of Woolies, they are not completely against boozing and gambling, they will continue to hold just under 15% of the company. The two will also stay friends, well paid up friends, sharing supply chain and logistics, some branding, and business support. Compensation to Woolworths will be circa $550k per annum.
With approximately 40% of Australians consuming alcohol weekly and over 5% daily there is a ready market although the consumption levels have been on a slow decline for years.
Interestingly, according to Roy Morgan consumption increased in 2020. We got on it during lockdown it seems.
If you can get over the ethics of the business, this is one for the watchlist.