Australians Drink Less Alcohol, More Spirits

Australians continue to show a change in their drinking preference as they drank less alcoholic drinks and beer, and more of spirits.

According to the report of the Australian Bureau of Statistics (ABS) released on Friday, 182 million litres of pure alcohol were made available for consumption in 2010-11, less 2 million litres compared to a year ago. Sales of beer, which is 42 per cent of all alcohol sold, declined 3.4 per cent, while sales of wine, which is 37 per cent - went down by 0.6 per cent. Beer sales used to account for 76 per cent of Australian alcohol consumption.

On the opposite side, sales of spirits went up by 4.8 per cent for the same period. Pre-mixed spirits and spirits account for 20 per cent of all alcohol sales.

The data means the average Aussie imbibed 10 litres of pure alcohol in the past 12 months or 2.2 standard drinks daily. The daily amount of alcohol consumption recommended by health authorities is just 2 standard drinks. Overall consumption dropped 1.1 per cent, the ABS noted.

The ABS report came out amid a price war by Australian supermarkets on Grange, considered Australia's most prized liquor. The recommended retail price of the drink is $625, but Coles started the price war by offering a 20 per cent discount to $499 at Coles' 1^st Choice liquor outlet.

Costco joined the price war by bringing down the price of Grange to $489.99, while the Dan Murphy Web site offered on Thursday afternoon Penfolds Grange 2007 for $479.99.

Woolworths, the main competitor of Coles, announced initially on its Dan Murphy Web site that the vintage's price would drop to $554.60, but the price is expected to go down further as the supermarket war intensifies.

However, the $489.99 price tag of Costco is only at three warehouse supermarkets in Melbourne, Sydney and Canberra, and the purchases are limited to club members.

A comparison indicated the lowest price of Grange is at 1^st Choice, but shoppers could only buy two bottles each. A similar two-bottle limit was made by Vintage Cellars, which is also owned by Coles. Vintage's price tag is $520.

With the entry of Costco as the third party in the price war, observers said it has changed the scenario as the battle has shifted from basic commodities such as milk, bread and detergent, to expensive goods such as wine. The competition is also no longer between big and small retailers, but between retail giants and big box retailers.

IbisWorld, an Australian analyst company, forecasts big box retail will grow at a faster pace in the country in the next three years. IbisWorld projects that there would be over 300 retail superstores in Australia by 2015, while market turnover is expected to reach $24 billion yearly.

The average sales of Australian supermarkets is $35 million yearly, but IbisWorld forecasts that within three years, the annual sales of Costco would hit $80 million.