Woolies accused of “letting Coles off the hook”

By James Atkinson

Woolworths has rejected the suggestion that it missed its chance to punish rival Coles for bowing out of the price war on mainstream beer.

At Woolworths' half-yearly results announcement yesterday, outspoken analyst David Errington said Coles had been allowed to reap the benefits of its higher margin strategy.

"I was surprised that with your vastly superior liquor group, you let them off the hook," the Merrill Lynch analyst said.

"In the old days, the old Woolworths would have certainly… When you've got your foot on the throat of the competitor you don't let 'em up," he said.

"Why didn't you drive home your advantage in liquor and really hurt your competitor when you had the chance?"

But CEO Grant O'Brien dismissed the remarks, telling Errington the retailer's share price and other metrics speak for themselves.

"I don't think anyone would describe the results over the half as letting anyone off the canvas," he said.

"From our point of view, we've continued to push very hard in both our BWS and Dan Murphy's businesses. There's been no let up. They've changed their strategy and that's their business. It hasn't changed how we run our business."

Woolworths' Australian Food and Liquor business increased EBIT by 6.1 per cent to $1.54 billion for the half year.

The company said the liquor business continued to deliver strong sales and market share growth in the half-year, underpinned by the ongoing expansion of Dan Murphy's and the "refreshed and evolving" offer of the BWS chain.