Liberty threat to suppliers

PERTH-based national retail chain Liberty Liquors has threatened to take at least two suppliers to the Australian Competition and Consumer Commission after being rocked by an unexpected change in trading terms.

Liberty Liquors boss Patrick Stephenson would not name the suppliers but confirmed rumour that he was considering legal action against two significant wholesalers who allegedly conspired to change his terms of trade without providing any notice.

He said he could not disclose further details but he has briefed his lawyers and the case could be taken to ACCC.

Mr Stephenson said the rumours had come at a bad time for his business and his profitability could be hurt by the suppliers’ actions.

Calls to various suppliers by Business News did not reveal any confirmation of names involved.

The behind-the-scenes drama at Liberty Liquors comes amid persistent rumours that the business has been sold, possibly to one of the major retail giants such as Woolworths or Franklins.

Mr Stephenson denied any deal has been struck.

“I have not signed anything,” Mr Stephenson said.

The industry has speculated for months that the Liberty Liquors chain has been sold for as much as $75 million.

In Perth, industry sources suggested Woolworths was a strong contender but it would have to find a way around a cap on liquor store ownership in Victoria where Liberty owns several stores.

Woolworths has reached the limit of store ownership allowed under existing Victorian law and would not be able to absorb Liberty Liquors stores which trade there without selling other stores.

But Woolworths lacks market share in WA compared to its presence in other states.

Buying Liberty Liquors would take Woolworths up to similar levels as Coles-Myer’s Liquorland/ Vintage Cellars empire in WA and allow it to head off any challenge from Australian Liquor Group which listed this year with the intention of becoming the third force in national liquor retailing.

ALG says it has worked through the consolidation of stores purchased for the float and expects to perform well over the vital Christmas trading period when most retailers generate the majority of their revenue.