Independent Liquor confirms The Mill purchase

The country’s third largest liquor company is going into the retail business with the acquisition of a discount, The Mill.

Both parties say the move, which had been widely expected in the industry, will level the retail market for consumers by offering greater choice.

For a start, it will enable Independent Liquor to compete better with its beer and liquor brands through The Mill’s 35 stores nationwide.

Independent Liquor chief executive Julian Davidson says the sale is expected to be confirmed by July, pending certain conditions.
No price has been disclosed.

“Our intention is to drive competition and provide New Zealanders of legal drinking age with a better selection and range of products when they walk through the doors of a liquor store,” he says.

“This is because of producer dominance in the retail channel, which can result in the destocking or blocking of some brands and product portfolios. We’ve experienced this first hand; it’s anti-competitive and should be challenged.”

Liquor retailing is dominated by Lion and DB, with Lion owning the LiquorKing and Super Liquor chains, and DB having sold Liquorland to supermarket co-op Foodstuffs.

All three liquor companies are overseas owned, Lion and Independent by Japan’s Kirin and Asahi respectively, and DB by Heineken.

A recent flyer from The Mill showed specials from all three brewers as well as a mix of big name spirits brands and those from Independent Liquor.

The move follows another Independent Liquor initiative to overcome competitive barriers when its Boundary Road Brewery entered the tap-beer market in 2011.

This is a more tightly controlled sector of the industry from retailing, because the large brewers help pay for bar fitouts and operate a “tied” system that favours only one company’s range of products.

Jeremy Livingston, who is the newly appointed chief executive of The Mill, says the deal opens up the possibility of a major face-lift for the chain.

“Part of our future plan is to refurbish the chain so as to lift retail standards and improve the shopping experience,” he says.

“We are also looking at franchising the store network, which will provide local operators with the opportunity to develop their own stores under a strong national brand.”