By James Atkinson
Liquor Marketing Group's decision to exit liquor wholesaling and enter into a $655 million supply deal with Australian Liquor Marketers (ALM) will deliver greater efficiencies for the whole of the liquor market, according to ALM boss Fergus Collins.
ALM parent company, Metcash, this week announced it had signed a new 15-year supply agreement with Liquor Marketing Group (LMG) covering supply distribution to approximately 1700 stores trading under banners such as Bottlemart, Down Under Cellars, Harry Brown, Sip N Save, Western Cellars, Liquor Legends and Urban Cellars.
ALM CEO Fergus Collins told TheShout the deal increases the volume through its sheds to in excess of $3.2 billion.
"It's positive news for LMG and all the customers from ALM, it's about efficiencies for everybody," he said.
In an internal memorandum obtained by TheShout, LMG told its members they will benefit from the agreement courtesy of scale-generated cost and purchasing efficiencies, and through access to improved logistics-related technology.
"The decision to exit wholesale operations and close down warehouses across the country followed exhaustive analysis of existing operations," it said.
"HLW and SALD have served the members well since inception. However, existing business conditions and funding constraints continue to impact our ability to meet the ongoing needs of our membership."
LMG told members all its other services and market-related activity will continue without interruption.
"In fact, the LMG board expects this change will further strengthen retail operations, particularly in the areas of consumer marketing and member services," it said.