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Australia: Woolworths to offload drinks, pubs over gambling problems

 |  July 3, 2019

Australia’s biggest supermarket chain Woolworths Group announced on Wednesday, July 3, it will combine and spin off its drinks and pubs units to focus on its core business, cutting back its contentious involvement in poker-machine gambling.

The demerger would give investors exposure to a standalone listed operator of 1,500 liquor stores and 327 pubs worth about AU$10 billion (US$7 billion), according to analysts, while reducing family-focused Woolworths’ reliance on slot machine revenue.

It also marks the beginning of the end of the major retailers’ addiction to poker machine revenue, after Woolworths rival Coles Group announced in March it was carving off its pubs business into a joint venture.

“A significant proportion of the world’s funds under management that would invest in this stock is concerned about its ownership of hotels and poker machines,” said David walker, large companies portfolio manager at Clime Asset Management.

Full Content: Financial Times

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