Australia's Woolworths to unload alcohol, gaming operations

Woolworths has faced increasing pressure to unload its gaming business.

Woolworths has faced increasing pressure to unload its gaming business.

AFP/Peter Parks

SYDNEY - Australian retail titan Woolworths will offload its booze and gaming operations, following in the footsteps of rival Coles and after a campaign by anti-gambling groups.

The firm said it would combine its Endeavour Drinks business with the hotels and gambling-focused Australian Leisure & Hospitality Group, forming a Aus$10-billion unit called Endeavour Group.

The new entity will become the country's biggest integrated drinks and hospitality business, with 1,500 BWS and Dan Murphy's drinks outlets, and more than 300 hotels, Woolworths said in a statement to the Australian Stock Exchange.

It is looking to hive off the new group next year, it added.

The move follows a similar move by Coles this year, which saw it sell its hotel and 3,000-strong poker machine business for about Aus$200-million.

Woolworths chairman Gordon Cairns said in the statement: "The board believes that a merger of Endeavour Drinks and ALH followed by a separation, is in shareholders' best interests and will benefit customers and team members of both groups."

The statement added that the separation would allow it to "benefit from a simplified organisational structure, a greater focus on its core food and everyday needs markets", while the new group will be able to realise its full potential".

Since Coles moved out of the sector, Woolworths has faced increasing pressure to unload its gaming business.

Gambling addiction is a major problem in Australia, with advocates for reform estimating people lose around Aus$12-billion a year -- with losses spiralling since the first machines were built in 1953.

A public inquiry in 2010 disclosed there were 115,000 "problem gamblers", whose habits can lead to serious health, family and financial issues. Another 280,000 were categorised as at "moderate risk". 

Source
AFP