Last year several south-west publicans told The Standard packaged beer was being sold cheaper by supermarkets and associated liquor outlets than hotels could buy it from breweries.

Federal member for Wannon Dan Tehan said news that heavy discounting had stopped would be a welcome relief.

“It didn’t seem right for country pubs to be going to their local supermarket to buy beer because it was cheaper than from the breweries,” Mr Tehan  told The Standard.

“There are things the market dictates, but diversity is needed. 

“There is no doubt this discounting was making life tougher for country pub operators.

“It would be a sad day if local pubs could no longer afford to sell beer and wine.”

Last week Coles told The Age it had stopped unprofitable bulk and corporate sales and reduced unsustainable price discounting.

An economist had earlier said the major liquor retailers had been losing money selling beer, with the estimated gross margin on a case of Victoria Bitter less than five per cent.

In 2011 Coles was reported to have negotiated $130 million in discounts from its liquor suppliers to help fund an expansion in the alcohol sector, helping to sharpen its price war with Woolworths.