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Off the shelf: Supermarket are under fire for alleged below-cost selling |
Buon giornio from Italy
Are we being taken for a ride when it comes to so-called 'discount' wines?
THOSE nasty supermarket people are ripping us off again’. That was the response from some to a recent story published in the Guardian newspaper and covered by several other newspapers. The supermarkets were – according to Jean-Manuel Spriet chief executive of Pernod Ricard, the giant French based, multi-national drinks company – forcing some wine producing companies to mislead customers, with false discounting.
Wines worth £3.99 were introduced onto the shelves at £7.99, than subjected to a promotional discount and sold at their proper price of £3.99. Around 60 per cent of all new world wine was sold at or below this price, he claimed.
This new attack on the supermarkets comes as the competition commission continues its investigation into allegations of unfair, below-cost selling of numerous products, including wine.
Spriet, whose company produces Australian wine brand Jacob’s Creek, was supported by Simon Lawson a leading light at English drinks giant Diageo, owners of American wine brand, Blossom Hill.
The accusations were made by highly placed executives; the supermarkets response came from anonymous spokespersons, presumably lowly press officers, who claimed that all half-price wine reductions were genuine. A position that seemed to be placed in question by the world’s biggest wine producer, the American owned Constellation group – also one of the biggest discounters – whose European chief executive admitted that 80 per cent of these wines were sold at the discounted price and claimed that some customers knew little about wine but wanted discounted prices and these wines were designed for them.
Days earlier the Oddbins chain – owned by Castels, a French bottling company – announced that from August 21 they would stop discounting single bottles of wine. A move described by the nation’s leading wine writer, Jancis Robinson as “brave”.
These are the latest twists in the saga that surrounds the continuing transformation of wine production from a predominantly family product with strong local and regional connections, into a global industry, dominated by large multi-national companies and their corporate managers.
The story begins around 20 years ago when the supermarkets decided to use our growing love affair with wine as a promotional tool.
Sir John Sainsbury saw wine as an expression of the good life and wanted Sainsbury’s to be in the forefront of delivering this improved lifestyle to his customers. Other supermarkets followed suit. Specialist wine buyers were employed to seek out good quality wines.
Wine moved from being the drink of a social elite to the beverage of choice for a generation of young drinkers.
The spearhead of this social revolution was the supermarkets’ own label. At one time 90 per cent of all wine sold in our supermarkets was own label, to-day that figure is around 30 per cent.
Recently the specialist supermarket wine buyers have disappeared and supermarket own label wines have been replaced on the shelves by brands such as Jacobs Creek and Blossom Hill.
The owners of these and other brands have attempted to dominate the wine market by supplying a range of wines for sale at a number of price points such as £3.99 and £7.99.
Supermarket customers may not know a lot about wine as claimed. Despite this apparent handicap large numbers of them have steadfastly refused to splash out on more expensive wines.
They have preferred value to brand hype. The supermarkets recognise this fact and are giving their customers what they want – a range of wines priced £3.99.
The charge levelled at the supermarkets is that they charge £3.99 for a bottle of wine worth £3.99. Hardly a crime.
It is the drinks companies who fail to supply good quality wine at higher price points, who are the real villains. |
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