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Woolworths’ liquor chain has eyes on craft beer market

In a move that no doubt harks back to the good old days of the horse drawn cart and milk man, Woolworths (ASX: WOW) liquor outlet Dan Murphy’s is trialling a concept which will see craft draught beers poured directly into take away (growler) bottlers for customers to purchase and take home with them. Customers can then bring the empty growler bottle back for a re-fill, creating a great way for customers to sample craft beers that may not otherwise be available.

Woolworths has already moved into the beer market through its shareholding in Gage Roads Brewing (ASX: GRB) so it is not surprising to see this latest move. Woolies’ increasing interest in the beer market is a direct threat to the market share of Wesfarmers (ASX: WES), which owns a number of liquor outlets including Vintage Cellars, and also Coca-Cola Amatil (ASX: CCL), which is pursuing more beer distribution agreements.

Foolish takeaway

Beer and spirits companies have often proved to be profitable businesses, which make it a sector well worth keeping an eye on. For investors in this sector Woolworths’ tactics offer both threats and opportunities for customers and competitors.

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Motley Fool contributor Tim McArthur owns shares in Gage Roads Brewing.

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