Dan Murphy’s saga: Prahran Arcade Cellar adds a new chapter

The business Dan Murphy built has long been known as a discount wine merchant, but it’s now making an upmarket foray.

When it became a discounters’ market, Dan Murphy decided: ‘If you can’t beat them, join them’. Picture: Max Allen

A couple of months before he died in 2001, I interviewed veteran wine merchant Dan Murphy, then a frail 84-year-old living in a small unit in suburban Melbourne.

Dan told me about his early years selling wine, first in the early 1950s from a small licensed grocery in Chapel Street, Prahran, then in the mid-60s from the much larger Prahran Arcade next door.

At that stage of his career, he told me, he styled himself as a “traditional English wine merchant”: he travelled to Rutherglen and Great Western to buy barrels direct from the producers, bottling the wine in his Chapel Street cellars. He imported claret from Bordeaux.

He established a wine club, published a newsletter — and, like the handful of other wine retailers around at the time, charged handsomely: “We were making margins up to 200 per cent,” he told me. “We were doing nicely, making good money.”

All that changed in 1975, when the Whitlam government cracked down on price fixing. Dan’s competitors decided to “have a go” at him by ending the “gentlemen’s agreements” and slashing their prices.

“Once you’d breached the sides of the dam, there was no stopping it,” he told me. “It became a discounter’s market. I just decided: if you can’t beat them, join them.”

Dan quickly became the biggest discounter of them all, of course, trading on the “Nobody beats Dan Murphy” tagline and opening other shops around Melbourne, each boasting “lowest liquor prices, guaranteed”. In 1998 he sold his thriving business — and his name — to Woolworths, which now has more than 200 Dan Murphy’s stores across the country.

Earlier this month Woolworths opened the latest addition to its retail empire — but, in this new store, discounting and lowest prices aren’t the main focus. Instead, the posh new Dan Murphy’s Cellar — nostalgically located in the Prahran Arcade building on Chapel Street — is a pointed return to the traditional, upmarket merchant model.

No expense has been spared in fitting out, stocking and staffing this new shop: a complete set of Penfolds Grange — every vintage since 1951 — is displayed on one wall of the original underground cellars where Dan used to bottle his wines a half-century ago; temperature-controlled Enomatic wine cabinets dispense tastes of fine burgundy in Riedel glasses; store manager Ian Wolfe has travelled to various Australian regions sourcing bottles from small producers who have never sold wine to Dan Murphy’s before.

During the past two decades Australia’s leading independent wine stores have been able to distinguish themselves from the rapidly expanding Dan Murphy’s chain through the superior expertise, range and service of the traditional merchant. Now, with Dan Murphy’s Cellar, Woolies has — perhaps worryingly for the independents — demonstrated that it can play in this space, too.

Towards the end of my interview with Dan Murphy back in 2001, I asked him what wines he still liked to drink. “Nothing but Bordeaux,” he said. “Mainly the great chateaus. I like Latour the best. I still have some old vintages going back to the 1960s”.

Before I left he insisted on giving me a gift and shuffled off into the depths of the house, returning a couple of minutes later with a bottle. You beauty, I thought. The old man has decided to share one of those 30-year-old Latours! Maybe it’ll be the legendary ’61 …

Wrong. Instead, grinning slyly, Dan Murphy handed me a Lindemans Limestone Ridge, a Coonawarra cabernet blend from the early 90s. “Here you go,” he said. “You’ll enjoy this.”

I thanked him — even though frankly I was a little disappointed. But a couple of years later, when I opened Dan Murphy’s gift and poured a glass, I realised the joke was on him: it was bloody beautiful, and I did enjoy it. A lot.