24 May 2019

Woolworths is under renewed pressure to quit its controversial pubs and pokies business, with one of its biggest shareholders urging the supermarket giant to get out of gambling to protect its reputation.

...Woolworths' most influential shareholders, Perpetual Investments, which has told the company's board it should ditch its pokie machines.

The investment powerhouse, which manages a $27.4 billion portfolio, had repeatedly told the Woolworths board that pokie machines are incompatible with the supermarket's expressed values and were a threat to its brand and reputation in the community....

...Perpetual had no ethical qualms over investing in gambling companies and took its position on ALH purely on business grounds, the sources said.

...Woolworths chairman Gordon Cairns had told major investors that his board had looked at "every way" to exit ALH, one source said, but that was complicated by Queensland's liquor laws, which require it to own pubs in order to hold licences for its Dan Murphy's and BWS bottle shops.

...Perpetual is one of Australia's most powerful private investors, with $27.4 billion of funds under management. It bought into Woolworths in early 2016, amassing a 5 per cent stake in the company.

...Woolworths declined to comment....

...A spokeswoman for Perpetual declined to comment.