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Big liquor companies pay up to R7000 for shelf space.
Big liquor companies pay up to R7000 for shelf space.

Shelf-serving liquor displays oust the little guys

LIQUOR NEWS

By Palesa Vuyolwethu Tshandu - Jul 17th 2017, 10:09

On the shop floor the battle of the shelf wars has intensified, as big beverage companies move to entrench their position by squeezing out smaller competitors from prime display space. 

One of these is multinational brewing company Anheuser-Busch InBev, which has upsized its packs across beer and cider brands and increased the height of cans of certain brands, specifically in the South African market.

Besides creating the need to buy extra shelf space, the bigger packs suggest there will be less space for competitors' brands. And with the proposed ban on alcohol advertising in mainstream media, store displays will be the next advertising battleground.

Ernst Henning, owner of Totpack Distributors, said big liquor companies such as Distell and ABInBev could pay up to R7000 a month for shelf space at independent liquor stores, while the cost of display advertising in a store could be up to R13000 a month.

"As a small company, we can't pay that sort of amount when stores buy R2000 of our stock. I can't take my brandy and put it on the shelf, because the shelf space belongs to them [big companies]," said Henning.

"The shelf space is being bought out for a year and we can't even put up a poster because they bought the display area and they pay these people on a monthly basis; that basically takes us out of the market."

The effect is that smaller liquor distributors are going out of business.

Like Henning, Boetie Rietoff, the owner of Cape Town-based company Somerset Wines, has had to put his business on the market. "We can't get our products listed with Pick n Pay or Shoprite Checkers."

ABInBev owns several brands, including Flying Fish, Castle Lite, Carling Black Label and Corona.

Distell owns ciders Hunters and Savanna, and wine labels Two Oceans and Cellar Cask.

Dennis Matsane, communications manager and head of corporate affairs at Distell said Distell competed for retail shelf space, along with all other beverage manufacturers operating in this sector of the market.
© BusinessLIVE MMXVII 

Read more about: sab | distell | abinbev

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