Alcohol sales return to torment distribution giant Migros


Migros has never sold alcohol in its supermarkets. In contrast, Migrolino supermarkets, which are owned by Migros and often found at train stations and gas stations, sell alcohol. © Keystone / Christian Beutler

After nearly a century of abstinence, Migros deputies are considering allowing the sale of alcohol in the supermarkets of Switzerland’s largest retailer. A saga with many twists that pit ethics and profit against each other.

This content was published on November 18, 2021 – 13:30

How many tourists who have just landed on Swiss territory have circled one of the 630 Migros supermarkets looking for a pack of beer or a bottle of wine? European customers may be surprised to learn that the Swiss retail giant has not sold alcohol or tobacco since its inception in 1925.

An exception that could be lifted: at the beginning of November, the deputies of the group votedExternal link by 85 votes to 22 for the sale of alcohol, but not tobacco. Now the committees of the ten regional cooperatives decide. If they approve the principle, the 2.2 million employees and associates will have the final say in a general vote to be held in early June. Regions where two-thirds of members have supported alcohol sales can then begin stocking their shelves with beer, wine and spirits.

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The decision of the meeting of the “orange giant” shocked, especially in the medium of the treatment of the addictions. The Blue Cross has warned of “betrayal” of Migros’ DNA. The association, which is committed to preventing and supporting alcohol addiction, says the company is in danger of losing its reputation as a socially responsible distributor.

Migros

With a turnover of 29.9 billion francs (2020), the Migros Group is the largest retailer in Switzerland and the largest private employer in the country, with 99,000 employees (women represent 59% of the workforce).

Migros is owned by its more than 2 million members, organized in ten regional cooperativesExternal link active in retail. The group also includes many industrial companies, several companies dedicated to trade, travel and logistics, as well as Migros Bank.

The ten regional cooperatives form the heart of the company. They are independently managed and maintain their own accounts. As far as retail sales under the Migros brand are concerned, they are free to decide on their sales territory and the number of employees. Their primary missions are the distribution of goods and the purchase of regional assortments, while the Federation of Cooperatives centralizes services such as purchasing, logistics and IT.

The Federation owns five trading companies, including discounter Denner, prepared meals specialist Migrolino and gas station operator and supplier of petroleum products Migrol. Migros also owns Digitec Galaxus, Switzerland’s largest e-commerce player, and Ex Libris, the number one online bookstore.

The Migros Culture Percentage, enshrined in its statutes since 1957, invested 142 million francs in 2020 in culture, society, education, leisure and economy, giving a wide audience easier access to socio-cultural services.

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A welcome difference

A reputation that has been building for nearly a century: In 1925, the visionary entrepreneur Gottlieb Duttweiler (1888-1962) filled five trucks with staple foods and sold the foodstuffs directly to customers on the streets of Zurich. The following year, the first Migros store was opened in the German-speaking city.

In 1928 Gottlieb Duttweiler bought a fruit juice factory and transformed it into a production center. He then decided to continue the former owner’s commitment to promoting public health.

“If we had offered wine when Migros was founded, the price would have been 58 cents per litre. It was a real danger! Many people would have taken up drinking or intensified their consumption,” Gottlieb Duttweiler said in a 1950s interview reported in the Zurich newspaper. NZZ am SonntagExternal link

However, this was not a real ideology: the entrepreneur himself enjoyed alcohol and tobacco. But the purchase of the factory left him in debt and took up the challenge of selling cheap fruit juices. A successful strategy: consumers flocked to this product.

Gottlieb Duttweiler was not always convinced of the relevance of a ban on the sale of alcohol, as the NZZ am Sonntag† Years later, when prices were higher and the abundance of Swiss wine became a problem, the entrepreneur offered to sell local wine to encourage consumption. He was then “almost stoned” by the assembly of deputies, he recalls. Even though Gottlieb Duttweiler was always against the introduction of alcohol in his supermarkets on principle: “If you stick to a principle for 27 years… you can’t give it up out of opportunism”.

Marketing expert Thomas Wildberger is behind the promotion campaign “Migros belongs to everyone”. He argues, in the German-language newspaper Tages-AnzeigerExternal link, that “waiving the sale of alcohol has always been a fundamental pillar of the company. This is one of the main criteria that sets it apart from the competition.”

“This special feature made the Migros popular, Thomas Wildberger develops. But she seems to want to be abandoned. Too bad, because it is precisely because of this difference that the public loves the Migros.

Economic problems

The reason the distributor develops a predilection for alcohol is ‘obviously economic’, the newspaper writes WeatherExternal link† “Migros is currently depriving itself of an important market segment,” underlines the daily Romand, recalling that every Swiss drinks an average of 52 liters of beer, 31 liters of wine and 3.8 liters of spirits per year.

“The retail sector raised 2.6 billion francs in 2020 with these drinks. In other words, 1 franc in 11 earned by Coop, Aldi, Lidl, Manor or Denner comes from the sale of beer, wine or spirits. It is twice less than meat, but 1.5 times more than fruit, specifies: Weather† Knowing that Migros controls between 35 and 40% of the Swiss food market, we can imagine that this historic shift would allow it to increase its turnover by at least 900 million francs a year.”

The former financial director of Migros, Mario Bonorand, is even more optimistic: he told the Swiss Telegraphic Agency that his ex-employer’s income could rise by 1.5 to 2 billion francs.

Alcohol anyway

In reality, Migros has been selling alcohol for years, but through different channels than the supermarkets.

“Understandably, Migros also wants to take advantage of this controversial trade, but why doesn’t it admit it? asks a journalist from BlickExternal link† Instead, constructions such as VOI Migros Partner are conceived and franchise concepts are developed. For the sole purpose of claiming that Migros does not operate any of these stores. It’s hypocritical.”

The Migros group sells alcohol and sometimes tobacco products in its subsidiaries Denner and Migrolino, on its online sales site Leshop.ch, in its Migrol service stations and in its VOI partner stores.

When the acquisition of discounter Denner was announced in 2007, industry observers saw it as a perfect match, pairing the size of Migros with alcohol and Denner tobacco.

In 1997 the takeover of the luxury brand Globus by Migros had already given rise to a lively discussion about the sale of alcohol. “In broad daylight, the tension became apparent between a new generation of leaders and a sort of old guard, made up of Gottlieb Duttweiler’s disciples,” says WeatherExternal link† At the time, people criticized the entry of alcohol and tobacco through the back door. We are talking about violation of the statutes of the cooperative. There is talk of a pocket knife in the historical principles of Migros.”

democratic changes

For most people, selling alcohol is primarily a matter of principle. But for some people this is a real challenge. German public radio SRFExternal link collected the testimony of Felix, a sober alcoholic for several years. He trusts that shopping with an addiction can be a real “obstacle” at times.

Passing the drink racks is particularly difficult for him: “It triggers something in me. I tell myself it might be a good idea to buy a bottle, or if I should take advantage of this special offer. I just want to avoid situations like that.”

If alcohol is not available, the step you have to take is much bigger to decide to buy it. “It’s a different way of shopping, especially at the beginning of abstinence,” Felix describes. I always had to pay attention to the places where I could or could not go, I had to make my purchases in a targeted manner. Felix adds that he has prepared his list of commands to exclude crossing certain departments.

Duttweiler must be turning in his grave, says a comment from the Tages-AnzeigerExternal link† Or maybe not. He rarely did what others expected of him.

Thomas Wildberger thinks it is a smart move to leave the final decision to the Migros employees. “We live in a democratic country, we are used to this kind of vote and we accept the result, whatever it is. In this case it will be the same,” he concludes in the Tages-Anzeiger

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