POSTED: 09 FEBRUARY 2011

Wine discounts: the case for paying just a tad more

I recall chatting a few years ago with the shell-shocked sales manager of a reasonably successful, mid-sized Australian wine producer, just after he’d been put through the mill during negotiations with one of Australia’s major retail chains.

The retail giant’s opening gambit had been along these lines: “What’s it worth for me NOT to move all of your stock out of the warehouse on to the footpath and leave it there for you to pick up?”

The sales manager realised, in retrospect, that the minion confronting him didn’t have that sort of power and that he should have called the bluff.

What he’d encountered was the sort of schoolyard bullying tactic which so many Australian businesses — farmers, small producers, service-station operators, etc — have been subjected to by Woolworths and Coles. Right now, it’s dairy farmers staring into the headlights, but the attack on viability extends to just about every laneway and valley of our productive sector.

Yes, I know that there are short-term benefits for wine drinkers in being able to buy wine — often very good wine — at significantly discounted prices.

But I also reckon that the bargains come at a long-term cost, exactly as the dairy farmers are currently conjecturing about milk.

Like everyone in business, grapegrowers and winemakers need to turn a profit in order for them and their families to survive and, hopefully, thrive.

If the prices they’re getting don’t cover costs, they will have to reduce those costs or go out of business. Sometimes that’s a good thing, most times it’s clearly not.

It can mean measures such as pumping up per-hectare grape yields, with resultant reduction in grape and wine flavour ... measures such as cutting back on the new oak barrels so necessary for maximising wine quality ... measures such as releasing increasingly immature wines on to a market that expects instant gratification.

In short, it will almost certainly mean a reduction in the quality of Australian wine.

I suggest that you vote with your wallet. Don’t buy from the supermarket-owned liquor chains ... Dan Murphy’s, Macs Liquor, BWS and Woolworths Liquor (all owned by Woolworths), and First Choice, Liquorland and Vintage Cellars (all owned by Coles). Yes, you’re quite right, that’s a surprisingly formidable share of the market.

But there are still plenty of independent wine retailers, though their future is threatened, too ... and, I’m sure, their removal is part of the supermarket giants’ grand plan. These independent retailers carry plenty of very well priced, high-quality wines, and they often have better-informed staff more able to guide you through the vinous minefield.

Better still, take a drive into the countryside, visit a cellar door, taste some wine while having a chat with the winemaker and give the producer the full benefit of your purchase. It’ll be fun for all concerned ... except, no doubt, for Coleworths, Dan’s Choice, First Murphy’s, etc.