Ferry firm to open `booze hypermarkets'

THE FERRY operator P&O is to open three drinks hypermarkets in French ports to win a slice of the burgeoning cross-channel alcohol market.

The company wants to enter the pounds 800m-a-year cross-channel market to offset the loss in duty-free sales from next year.

P&O sells more than pounds 200m worth of duty-free goods a year on its ferries but it is set to lose most of that revenue when duty-free ends next June.

Day-trippers looking for cheap drink could be able to shop at P&O warehouses in Calais, Le Havre and Cherbourg from the middle of next year.

The move is set to trigger a battle with the retailers already operating in France, led by Eastenders, the huge Calais cash-and-carry outlet opened 10 years ago by Dave West, a former barrow boy. Tesco, Sainsbury and Victoria Wine also have shops in the area.

The market for cheap overseas alcohol has grown at breakneck pace in the past few years and now accounts for around 15 per cent of all drink bought by Britons in off-licences and supermarkets. Beer tourism cost the Exchequer an estimated pounds 150m a year in lost import duty, according to recent figures.

Graham Dunlop, chairman of P&O Ferries, said the company had identified three sites in the French towns near the boarding points for its ships and added that it was in discussion with the French authorities on building the warehouses.

Mr Dunlop said however that the company had to overcome objections of local shop-owners who sit on the local chambers of commerce which own the land.

He said that shoppers with P&0 would be able to phone through their orders days before their trip and collect them on their departure for England, a facility offered by few existing warehouses. The shops would have large car parks.

Mr West, the pioneer of cross-channel shopping, said he was not concerned by the P&O offensive. "It's very, very competitive over here," he said. "The mere fact that it is a P&O cash-and carry is not going to convince people to go there without shopping around."

Mr West, who has built Eastenders into a pounds 42m-a-year business, said that the transport giant would find it very difficult to make a profit on its sales as margins in the warehouse business were much lower than in duty-free sales.