Dan Murphys is a highly successful liquor store with 248 outlets throughout Australia and is a fully owned subsidiary of Woolworths Group Australia (WGA). In 2019, WGA merged its drinks and hospitality businesses (Endeavour Drinks and the ALH Group (ALH)), to establish the Endeavour Group Ltd (EG). The merger was a strategic initiative to enable the de-mutualisation of EG from WGA at a future time. According to Rickard (8 June, 2021) while WGA stated the sell off was to enhance shareholder value through a greater focus on each business core customers offering and growth opportunities, the real reason was that WGA wanted to exit the poker machine business. As the owner of 12,400 electronic gaming (poker machine) licences, Rickard suggested WGA was increasingly off the radar for many fund managers because of its ownership of poker machines. EG was listed on the Australian Stock Exchange (ASX) in 2021.

In its promotional material, Dan Murphys tells the story of its namesake (Gibson, 2021): "One man built his reputation on a handshake. He made a promise that no matter who you were, or what you'd like to drink, he'd have that drink at the lowest price." However, that promise appears to have cost WGA a lot of money and a heavy hit to its reputation. A five-year battle to acquire a liquor megastore approved in Darwin and sited near three dry or alcohol-free areas, was abandoned in April, 2021 following a strong and sustained backlash from Aboriginal and health groups.

Northern Territorians average per capita consumption of alcohol is among the highest in the world. Rates of alcohol harm are shocking, including presentations to hospital emergency departments, traumatic head injury, hospitalisations for acute alcohol disease, alcohol-related domestic violence and child abuse (Thorn, 2021). Therefore, the advocacy for this disastrous proposal by one of Australias biggest corporations had the potential to put Aboriginal health and wellbeing at grave risk (McInerney, 2021).

Initially, WGA did not bow to pressure from local groups and mounted a robust defence of the Darwin site. It even went so far as to seek a change of legislation before accepting the decision of an independent review panel early in 2021 (refer to the Timeline at the end of this paper). In the aftermath, WGA CEO Brad Banducci issued an apology and conceded the organisation did not listen to the concerns of indigenous groups, the voices of First Nation people inside of WGA, and their advisory panel, and did not follow their Reconciliation Action plan. Its deeply ironic that we can sit here and talk about our support for the Uluru Statement of the Heart[1] but that needs to be reflected in how we run our business and the things we need to change, said Mr Banducci (Mitchell 2021b). We need to get our own house in order.

What was at stake?

For Woolworths, the $40m investment was welcomed by local business groups as an answer to economic stagnation and greater consumer choice (Gibson, 2021). What began in 2016 with the original application to build the liquor megastore at the proposed location, saw a five-year run of rejections, appeals, opposition and discussion. Cumulatively, this put pressure on EG (CEO Steve Donohue), to announce in November 2020 that it had agreed to move the site of the proposed Dan Murphys Darwin store to be further away from these communities. The group said this decision had been made after extensive consultation with community groups. Interestingly in December, 2020 WGA announced it had commissioned an Independent Panel Review (IPR) of the Darwin plans, which would review health concerns, stakeholder engagement and other processes behind the store. At the time, WGA Chairman Gordon Cairns said: We acknowledge that there are some in the community that feel they have not been adequately consulted regarding the proposed store. The IPR will provide a further opportunity for them and other stakeholders with a legitimate interest in the development to express their views (Allen, 2021).

For local indigenous, health and community groups, issues with alcohol related problems meant there was vehement opposition to the planned investment. The proposed megastore was within walking distance of three dry Aboriginal communities, including Kulaluk, Minmarama and Bagot. Olga Havnen, Chief Executive of Danila Dilba said Darwin was already awash with takeaway liquor and that we dont need another store, especially one located so close to three dry Aboriginal communities. She also stated: Theres no harm caused to the community by taking the time to properly consider the public interest and community impact of the proposal. But there is a lot of potential harm in a rushed process that neglects the public health impact (Allen, 2021).

For the NT Government, it see-sawed between attempts to curb alcohol-related harm and promote development. When elected in 2016, the government made it clear it was serious about the territorys alcohol problems. It reinstated the Banned Drinkers Register; appointed former Chief Justice Trevor Riley to conduct a root and branch review of the territorys alcohol policies and legislation; and accepted all but one of the 220 recommendations of Rileys review, including establishing an independent liquor commission. However, this began to change once the reforms came into effect. The 400 square metre ban was repealed, the governments opposition to WGAs proposal evaporated and it seemed to become less enamoured of the commissions independence (Thorn, 2021).

Sydney-based lawyer Danny Gilbert was scathing in his review, which found WGA and the government worked together to find a way around the barriers to the developments approval. They ultimately decided to legislate their way out of the difficulties, bypassing the independent Liquor Commission and giving the Director of Liquor Licensing the power to fast-track an approval. Instead of doing its own dirty work, the government had engineered a process that made the Director of Liquor Licensing responsible for determining the application said Thorn (2021). Community groups expressed disappointment over the decision and accused WGA of corporate wilful blindness, comparing the decision to the destruction of Juukan Gorge[2] by mining company Rio Tinto (Powell, 2020, 2021a; Knight, 2021). I believe the decision by WGA chairman Gordon Cairns and CEO Brad Banducci to aggressively pursue their desired outcome is a good example of corporate wilful blindness, said Olga Havnen.

For business investors, Dan Murphys withdrawal may have ongoing ramifications according to Opposition leader Lia Finocchiar: "The Gunner government's reaction and continual shifting of the goalposts made it very clear, even to the most casual observer, that the Northern Territory is not a good place to do business (Gibson, 2021). The NT Chamber of Commerce chief executive Greg Ireland concurred saying the scrapped proposal would mean the loss of new jobs and affect the perception that the NT was a place to do business (Read & OMallon, 2021). However, for other business leaders such as Australias richest man, Andrew Forrest, the decision to withdraw made sense. Mr Forrest had previously criticised the companys choice to open a dirty big grog shop near the Indigenous community (Powell, 2021).

The aftermath

Woolworths/Endeavour Group

In the upper echelons of corporate Australia, brand reputation trumps local profits (Gibson, 2021). When opponents of the project took their fight directly to the WGA board, warning its national reputation was at risk if it allowed its subsidiary to proceed with the controversial Darwin project, the Board took note and commissioned an independent review. That report was highly critical of WGA officials, Michael Gunners Labor government, and the actions of the territorys Director of Liquor Licensing Phil Timney, in approving the development in the face of the opposition from health experts and the wishes of Darwins Indigenous community. WGA management agreed, apologising:

"We did not do enough in this community to live up to the best practice stakeholder engagement to which we hold ourselves accountable," Mr Cairns, WGA Chairman said. In particular we did not do enough stakeholder engagement with a range of Aboriginal and Torres Strait Islander communities and organisations."

BUT WGA CEO Brad Banducci denied the company had done anything wrong in April (Allam & Butler, 2021). Theres nothing wrong with what weve done, but we can improve it, and we have high aspirations for the way we should operate, he said. He then sought to put some distance between WGA and the EG; at a shareholder briefing on April 29, 2021 he did not rule out the prospect of a Dan Murphy's outlet opening elsewhere in Darwin but statedfuture plans were a matter for the WGA subsidiary which is demerging from the supermarket chain (Breen, 2021):

"What we have announced today is that we will not be proceeding on the current location," he said. "As to whether there's a future Dan Murphy's in Darwin that would be up to the Endeavour Group but certainly in any engagement process going forward we will take on board the Gilbert Review findings and adjust how we consult on those matters."

WGA then formally surrendered its liquor licence back to the NT Government on April 29, 2021. In a letter to the IRP Chair, Danny Gilbert, on June 9 WGA Group Chairman, Gordon Cairns, Group CEO, Brad Banducci and Group Sustainability Chair, Holly Kramer stated:

We clearly failed to meet our expectations and we deeply regret our insensitivity to critical stakeholders in Darwin and beyond, and our own external Indigenous Advisory Panel, whose advice we did not seek. For that, we unreservedly apologise. At the heart of our reflections today is strengthening our foundations for deeper, and more thoughtful and meaningful relationships with First Nations peoples. Relationships built on listening, learning and education. Relationships underpinned by equity and respect. Without those foundations it will not be possible for us to achieve our ambitions for full reconciliation.

Banducci also admitted, in June 2021, that The buck stops with me . . . Ive learnt a lot(Mitchell, 2021a; Butler, 2021). Powell (2021) reported that WGAs executives would not lose their bonuses but chief executive Brad Banducci has pledged to base a portion of WGAs long-term executive remuneration in the future on the companys reputation to ensure issues such as those with the since-axed Darwin store would not be repeated.

External stakeholders

Olga Havnen, Danila Dilba Chief Executive said it was a win for ensuring big corporations take into consideration the social and economic impacts of their businesses:

Those things have got to be taken into consideration. This is why we have environmental laws. This is where we have restrictions on the sale of certain products. For example, we dont sell alcohol to kids theres a reason for that. I think these sorts of social responsibilities need to be taken into account and considered seriously, and that its not enough just to focus on the profits. Profits dont come before people or before the environment, she said (McInerney, 2021).

Several external stakeholders have also called for greater corporate responsibility (McInerney, 2021). The Public Health Association of Australia (PHAA) welcomed the news that WGA had cancelled its plans for the store saying it was good that the retail corporate had listened to the concerns of Indigenous groups. But it also sounded a warning, saying it was disappointing to hear from the CEO Brad Banducci that WGA may search for a new location for the store. These stores will cause serious alcohol harms wherever they are, and its time major retailers listened to the expert public health advice on these issues, the PHAA tweeted.

The Royal Australasian College of Physicians (RACP) also welcomed WGAs decision, saying the news comes as a relief to specialist physicians who have been seriously concerned about the impacts of building a liquor megastore and the harms that it would bring to the community. When we increase the access to alcohol in the community, we see a direct increase in alcohol related harms, said President John Wilson. After all the progress thats been made in reducing alcohol related harm in the Northern Territory, building a liquor megastore would have been a disappointing and an unnecessary step backward. We hope that this will herald the start of a process where more socially responsible decision making is made by commercial entities about the impacts of alcohol-related harm in the communities they serve.

AMSANT, Danila Dilba, Foundation for Alcohol research and Education (FARE) and NTCOSS are asking the retail giant to release the Gilbert Review immediately, in the interests of transparency. This is an important opportunity for Woolworths and other big alcohol retailers to re-assess their community consultation processes and acknowledge the harms their stores do to so many communities across Australia, they said. Communities should not need to fight so hard for so long ever again this a unique opportunity for a re-set of liquor store approval processes in the NT and indeed across the country.

Question 5.

In responding to the Gilbert Review, WGA stated:

For some years, the Woolworths (WGA) team has aspired to live our purpose in all that we do. Our purpose to create better experiences together for a better tomorrow - is connected to a great deal of our decision making and what we do every day. The values which flow from our purpose - to do the right thing, to care deeply and to listen and learn - guide how we work as a team within Woolworths, and how we engage with our customers, suppliers, communities and governments.

We acknowledge and fully accept that, in proposing the Darwin Dan Murphys in the way that Woolworths did, Woolworths has not met all of the aspirations and standards in its purpose and values.

1. Analyse why WGA was so out of touch with its core values.
2. Strong leadership is critical to ensuring that change initiatives are successfully implemented. Using several of the key leadership tasks outlined in Table 9.2 of Hayes (2018), advise what you believe WGA leadership should do now and why.