Don't pay so you can read it. Pay so everyone can!

Don't pay so you can read it.
Pay so everyone can!

Every phone is a bottle shop in alcohol’s Netflix era

by Zacharias Szumer | May 2, 2024 | Business, Latest Posts

Australia’s major alcohol retailers are increasingly moving into the digital space, aiming to emulate the methods and the successes of popular streaming services. But what are the risks? Zacharias Szumer investigates.

As advocacy groups have long warned, we have well and truly entered the age in which ‘every phone is a bottle shop’. Many of the largest Australian liquor retailers – including Dan Murphy’s, BWS, Liquorland and Cellarbrations – all have apps through which purchases can be made.

Some stores require you to visit a website to order booze for delivery or in-store pick-up, but it’s still a relatively frictionless transaction. What’s more, Australian companies are leading the alcohol e-commerce race.

World’s largest e-alcohol retailer

Dan Murphy’s has become the largest alcohol e-commerce company in the world, according to Statista – a market research company.

In addition to its app and website, Dan Murphy’s also offers a variety of online-only deals for members of its My Dan’s loyalty program, which boasts an astounding 5.4 million “active members” – around 20% of the Australian population.

An “active member” is anyone who has used their membership in the last 12 months. Total membership numbers are far higher. In 2022, the AFR reported that number at 6.2 million people – around 30 per cent of Australia’s adult population.

Top five online alcohol retailers

Data source: Statista.

And the numbers continue to go up.

Online sales at Dan Murphy’s and BWS, both owned by the Endeavour Group, are growing at over double the rate of their overall sales, according to recently released financial documents.  Online sales now make up almost 10 per cent of Endeavour’s total retail sales.

Endeavour’s closest competitor, Coles Liquor – who owns Liquorland, Vintage Cellars and First Choice – saw a far more dramatic disparity. Its total retail sales were up 2.8% in the first half of the 2024 financial year, but its e-commerce sales were up almost 15%.

Who spiked the ‘data soup’?

Through apps, websites and loyalty programs, alcohol retailers can construct increasingly accurate profiles of users’ tastes, and use this information to target them with advertising and promotions. The profiles are, naturally, based on past consumption.

For example, if Zacharias Szumer previously bought the GlenDronach 15-Year-Old Revival Single Malt Scotch Whisky, he will possibly enjoy the Bunnahabhain 18-Year-Old Single Malt Scotch Whisky. So why not recommend he give it a try?

In fact, the Endeavour Group has previously engaged with Spotify and Netflix, seeking advice on how to recommend and promote new alcoholic products to consumers.

Caterina Giorgi

FARE CEO Caterina Giorgi

Foundation for Alcohol Research and Education (FARE) CEO Caterina Giorgi told MWM that liquor retailers like this were “trying really hard to profile people to within an inch of their life so that they can target them based on their vulnerabilities.” She continued:

Aggressive, targeted online alcohol advertising creates a vicious cycle, in which someone who already consumes a lot of alcohol will see even more ads for alcohol.

A 2019 study found that 36% of alcohol in Australia is consumed by the heaviest-drinking 5% per cent, while 54.1% of alcohol is consumed by the heaviest-drinking 10%. Giorgi contends that:

These companies really rely on people who are most at risk to buy more alcohol.

A 2023 study co-authored by FARE and the Victorian Health Promotion Foundation found that 83% of participants agreed or strongly agreed that marketing makes it more difficult for them to reduce their use of alcohol and other harmful substances.

Previous research also clearly demonstrates that online marketing for alcohol is associated with increased use and consumption, FARE says.

“All of the data goes into a data soup, and it’s used to build a profile of you. So that means things like the amount of alcohol you’ve purchased in the past, maybe even if you’re looking up information on alcohol or seeking support…”

In a recent open letter to National Cabinet, FARE also said “addressing predatory and high-risk marketing that pushes bulk alcohol sales, including data-driven marketing,” were an essential part of preventing violence against women and children.

Social media advertising

Of course, apps and loyalty programs aren’t the only places where a person’s penchant for a tipple may be part of their algorithmic profile and thus generate the advertising with which they are targeted.

By clicking through to Dan Murphy’s ‘ad library’ on Facebook, we can see that the company is currently running over 70 individual advertisements. Liquorland was running over 30. However, users can’t see how much the company is paying Meta for the ads – as they can with political advertising.

Ads on Meta platforms – Facebook, Instagram and Threads – are all targeted, as they are on all social media platforms.

An average of 765 alcohol ads are being placed each week on Meta platforms in Australia, according to a recent study from a joint research project between Curtin University, Monash University and two Qld universities.

Naturally, these ads link to websites where customers can make purchases.

Testing a theory

While Giorgi wasn’t sure if a person’s searches for help with alcohol consumption would feed into an algorithmic profile that served them more alcohol ads, she said there were currently “no rules” that would prevent it.

To test this theory, your correspondent tried Googling phrases such as “help for drinking too much alcohol” and then clicking on some of the first results that came up – usually links to self-help resources or rehab clinics.

Google alcohol searches

Some of the searches conducted by your correspondent

This also included searching and clicking through to some Facebook pages for rehab clinics and other alcohol-related support services.

In the week after the search, there certainly did seem to be a noticeable uptick in ads for alcohol appearing on my social media feeds.

Internet alcohol ads compilation

A small compilation of some of the alcohol advertisements that popped up in the week after those searches by your correspondent.

Still, this is an entirely subjective impression, and your correspondent has written about and thus searched for alcohol-related topics in the past.

It’s also important to clarify that social media giants like Meta allow users to go into their “ad preferences” and see fewer alcohol-related ads – if they’ve been tagged as interested in these ‘topics’, as your correspondent has.

However, when your correspondent tried to request that Meta show him fewer ads related to “spirits, beer and wine”, the system returned an error reading: “This page isn’t available at the moment”. 

On the laptop, this happened over three consecutive days and on various internet connections. However, the functionality didn’t seem impaired on the mobile app.

Coincidence? I don’t know; I might need a drink to figure it out …

Independent beer-makers captive to liquor majors, supermarket duopoly

Zacharias Szumer is a freelance writer from Melbourne. In addition to Michael West Media, he has written for The Monthly, Overland, Jacobin, The Quietus, The South China Morning Post and other outlets.

He was also responsible for our War Power Reforms series.

Don't pay so you can read it. Pay so everyone can!

Don't pay so you can read it.
Pay so everyone can!

Pin It on Pinterest

Share This