Supermarket giants Coles and Woolworths are facing a growing backlash against plans to open liquor stores in the heart of Margaret River.
Wine Industry Association of WA general manager Aymee Mastaglia said the move would threaten the town's coveted status as the State's premier wine region, which was built up by mum-and-dad wineries.
She was worried fierce competition between the supermarket giants would drive prices down and muscle out independent bottle stores and cellar doors which would not be able to compete.
Ms Mastaglia said the Coles and Woolworths' marketing strategies tended to focus on their private label wines, which were produced exclusively for their liquor stores under contracts with wineries, rather than locally produced labels.
She said they often bought bulk amounts of wine from wineries at cheap prices and bottled them with labels which looked as though they had been produced by independent, boutique wineries.
"Even if consumers want to support local business, they often don't realise they are buying the supermarket's private labels," Ms Mastaglia said.
IBISWorld senior analyst Naren Sivasailam said though Coles and Woolworths' private label share of liquor sales was still relatively small at a combined 6 to 7 per cent, the practice was expected to increase over the coming years.
Brookwood Estate owner Trevor Mann said Coles and Woolworths liquor stores would take business away from cellar doors which have been set up by family-run businesses that had built Margaret River into a wine mecca and major tourist destination.
"I think Coles and Woolworths coming to Margaret River will do the local liquor industry as much good as $1-a-litre milk did for farmers," Mr Mann said. "The duopoly is mega capitalism that has gone far beyond free enterprise."
Margaret River Hotel spokeswoman Rachel House said the bottle stores would damage the town's unique brand, which was defined by eclectic stores and independent businesses.
Coles spokesman Jim Cooper said a Liquorland would bring added competition and choice to the region but it would still support the WA wine industry.
"Our average Liquorland stores in WA carry about 800 wine lines, and we have over 130 Margaret River wines in our range," he said.
A Woolworths spokeswoman said their stores focused strongly on local wines.
The Woolworths and Coles applications will be heard by the WA Liquor Commission on May 1 and May 2 respectively.