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How to Safeguard the Health of the UK Wine Trade

The UK wine trade is one sick puppy. All of us – retailers, brand owners, producers, bottles, designers, marketers, PRs, press - deep down know this to be true.

Many have been trying to draw attention to this – ranging from Robert Joseph years ago to Michael Cox (Wines of Chile) and Richard Cochrane (Bibendum) in the latest issue of Harpers. Many others think it but can’t say it out loud.

But everyone is struggling to find a solution. I would like to venture one here.

 Background

The UK wine trade is in the early stages of terminal decline. Retailers have collectively chosen the wine aisle as a competitive battleground and trade driver, and as a result the majority of consumers are now trained to buy on promotion – it’s etched on their DNA. Margins have been reduced for suppliers and producers, and VAT & Duty increases have further squeezed possible profits. And as if that wasn’t bleak enough, wines are becoming increasingly homogenised, especially through the major multiples.

The constant goal of delivering what the consumer wants is not, in the long run, the best thing for the consumer – it sparks a vicious circle of reduced prices, squeezed margins and reduced quality.

Wine has lost its way, We need something drastic to stop this spiral, build value back into the chain for all, ensure the long-term health of the UK wine trade, encourage and afford wine diversity and, finally, promote wine in a responsible way. An electric shock to the heart is vital – but not something we can do ourselves (unless you are James Bond in Casino Royale with a modified Aston Martin).

Solution

I propose that the UK drinks trade petitions the Government to legislate for restrictions to apply to the sale of alcohol on promotion. This would limit extent, depth, frequency and timing. My original idea was an out-right ban, but that might be a bridge too far from a standing start.

 Why involve the Government

Why not just introduce this as an industry initiative? Because it would never happen and would never work. It is illegal for retailers to discuss such an initiative amongst themselves, and it would also require every retailer to behave in the same way and abide by a single set of rules.

 Result

  •  Value is built back into the supply chain – and for all links
  •  The subsequent stability of wine prices will be a more responsible way to retail wine, and will better allow customers to judge wine value vs quality themselves
  • It will allow wine suppliers and brands to communicate about quality, taste, story and provenance again, rather than about price
  •  It will position the drinks trade as a responsible sector, trying to make a real difference to its suppliers, its customers and to society as a whole. It should appease the anti-drinks lobby, being a proactive, industry-backed initiative asking the Government for regulation.

 Expansion

This initiative should be expanded to encompass the entire alcoholic drinks industry, to ensure there is no bleed from wine to other categories and to ensure responsible retailing throughout BWS.

This is not a rant against the supermarkets, or legislation, or consumers – not at all. I’m simply trying to point out that for a number of reasons we, as an industry, are in a bad place – and we need something quite extraordinary to get us out of it.

I’m not asking anyone to make less money, In fact I am asking for the chance to charge the consumer a little more, but in a very transparent way that they will come to appreciate and understand. Unfashionable? Maybe. Naïve? Unrealistic? I don’t think so. I am convinced that we could do it together, with each other’s support.

 

 

Comments

UK Wine Trade

We whole heartedly agree that the Government should look into offers etc ...As a local family run independant wine retailer in Hampshire we have to allow for the offers at all the big chain supermarkets so we try to encourage our customers to come and try with Wine Tastings and a Monthly Wine school held at the shop. We are competitive on prices but cannot compete with the 3 for 2 offers available in supermarkets.. Put we also do not stock any wines available in the supermarket and pride ourselves on knowledge and hand picked wines

Agree

Been saying this for a while in Just Drinks.Govt simply putting up duty does no good to anyone. Problem with binge drinking is that people stoke up on alcohol that's cheap. Legally, they can't ban promotions (they do this in Norway, for instance, but they have a monoply there, so control the sale) but I don't see why they couldn't modify them, so that it's not permitted to price promote ANY alcohol more than 25% of its official RRP. Wine promos are bad. But if we're looking at health effects, what happens with spirits at Xmas is far worse. And highly irresponsible for a country that's supposedly concerned about the health of its citizens. This is a problem for the govt to legislate on, not the drinks industry. But I think the drinks industry could have spent its time effectively in pushing ministers to take action on the matter.

I agree that the government

I agree that the government will be able to help in this matter. I do, however, also feel that a more educated consumer will begin to demand a better quality wine as opposed to the mass manufactured 'vino collapso' that covers 80% of UK supermarket shelves.

There is absolutely no way you can maintain a high level of quality in mass-produced wines. Sadly though, this is the kind of wine that most consumers know and therefore accept.

If they had a clearer idea of how a good quality wine compares to its mass-produced sibling, there's no doubt in my mind that they would prefer the former.

This is something that is seen worldwide; consumers find a 'brand' that they deem to be good and seldom venture away from it.

Tutored tastings and wine evenings would provide the opportunity for consumers to taste and experience the difference for themselves.

Ultimately it comes down to the rule of supply and demand and if the demand changes accordingly, so would the supply. There are MANY fantastic wines out there and highly competitive prices.

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