Are Wine Festivals, in supermarkets and national wine retailer, a good thing or not?
While the consumer loves it, the journalists and bloggers are relaying it as a free advertising, for the wine maker, but also, and mainly, for the supermarkets and big national wine retailers.
More and more small “domaines” are the stars of the wine festivals. Are they chosen because supermarket buyers recognise the passion of the winemaker beyond the wine and the quality of the product; is it because of the original label and packaging of the bottle which will attract the consumer?... Or is mainly because of the price they can buy it at?
Most of the sales of small wine producers are normally done through a network of independent wine merchants and directly from the estate. More often than not, the producer is not selling all his production. So when he is approached by multinational retailers and supermarkets, he believes that it is making good business sense to sell the rest of his wines to them. Not only he gets rid of his stock but he also thinks he will get exposure from which he will benefit the following year when costumer will look for his wines through his traditional network of independent retailers.
The first contact is made, the samples drunk and approved. Now is the time for the negotiation where, usually the producer is forced to bring his margins down to the minimum and more often than not selling his wines at a loss.
The wines are then ready to be stacked up on the shelf at a “very generous” discounted price which is quite often 20% cheaper than the independent wine merchant’s price.
The small wine merchant, who hasn’t got the necessary buying power, is the perceived as greedy by his customers. Unfortunately, he cannot survive on 10% margins. Annoyed, he takes contact with the producer who tries to justify himself. But the trust is broken and the wine deserted.
The following year, he is then left with a bigger stock to try to sell due to the loss of his traditional network and the fact that, contrary to his belief, the direct sales haven’t increased because consumers received other so called “bargain”.
What is left for him to do? Return to the same buyers who will try, and succeed, to get a better price. The downward spiral has begun.
Supermarket bought wines represents around 80% of all the wine bought in France and other countries and it seems that we taking that statistic like a fatality.
By acting like we are, we are feeding the coffers of big multinational companies for whom customers are just a number and therefore destroying our local and independent retailers so important to our communities.
We are also putting enormous pressure on the producer who, in order to survive, will cut corners at the detriment of the quality of his wine because he doesn’t sell it rapidly enough.
And finally, we are contributing to a standardisation of taste and a devalorisation of the “appellations d’origine controlée.
We all know the consequences of supermarkets buying regarding the dairy and the meat industry. The same goes for the wine industry.
This is merely a translation and I would like to thanks Michel Vinodis Vandeneuker for the original French article
