Liquor Trade Take-over

Press, Volume CIX, Issue 32315, 5 June 1970, Page 1

Liquor Trade Take-over

(N.Z. Press Association)

DUNEDIN, June 4.

In the last 18 months, at a cost of millions of dollars, Dominion Breweries, Ltd. of Auckland, has gained control of more than half the hotels in Otago and Southland. The company has made outright purchases of more than 30 per cent of these, has given strong financial support in other cases, and has options to purchase many more hotels. Even people within the industry have been surprised at the quiet, but rapid penetration the Auckland brewery has made into South Island liquor outlets. The company has acquired two breweries, at Nelson and Westland, and five large wholesale firms, and now controls 84 of the 161 hotels in Otago, Central Otago and Southland.

In one move, it ensured for itself 87 liquor outlets by taking over the co-operative, the Southland Wine and Spirit Company, and, by so doing, tranquillised the belligerents in Dunedin’s protracted hotel price-cutting war.

The southern area, the last stronghold of independentlyowned hotels, was largely disregarded by the major interests in the liquor industry until the liquor war; both New Zealand Breweries and Dominion Breweries were preoccupied with development in the north. The rise of the Southland Wine and Spirit Company Co-operative, however, with the marketing advantages it gave to its price-cutting member-hotels, posed a threat to which wholesalers responded by increasing their investment in liquor outlets. Hotel values, pushed up by these initial moves, were accelerated by Dominion Breweries’ interest. One Dunedin hotel broker,

Mr H. J. Crawford, estimated today that hotel values had risen by about 20 per cent in the last year, and he predicted that they would go even higher. “This gain has been over and above the considerable amount of money spent on hotels to meet commission requirements," he said. The main aim of Dominion Breweries in purchasing hotels would undoubtedly be to provide increasing outlets for bottled beer sales, but also for their expanded wholesale business in other liquor. The company’s chairman (Sir Henry Kelliher) recently expressed great optimism about the tourist potential of the South Island, and a representative of the company today took a similar line.

“The brewery wanted to get in on the ground floor of the rapid expansion of tourism that is expected in the South Island,” he said.