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General Wine
Reflections on Wine UK Retailing and Australia’s Role
Friday, 3rd September, 2010  - David Farmer
"When in Rome" - a rather dapper David L. Farmer, Esq. reflects on the UK wine market.

In the What We Drank Last Night series I have posted notes on 11 tastings of mostly European wines termed ‘The London Tastings’. This article summarises what I learnt from drinking a wide range of wines, many of which I only had only a rusty knowledge or was totally unfamiliar. I also visited numerous wine stores, supermarkets and wine bars so I add some thoughts on retailing.

Views on Quality

In general and even allowing for the small sample of wines I tried, few of which were bargain basement wines, European wines contain a much higher percentage of wine making faults than Australian wines. When you consider the depth of talent in the English wine trade this is a bit alarming. With that said most of the wines I tried by the glass in the pubs, many from Chile were more than acceptable while those in wine bars or ordered by the glass in restaurants, mostly French or Italian, were good to excellent. As is the way when sampling wine the new or novel can often seem better than what you are familiar with so when I off-set this factor, the London best equal the local best, and any difference is what you would expect from varietal and climate differences. Thus I am not a believer, for example, that the wines of the Rhone are better than say the Barossa Valley, as both made well are enjoyable. This may seem quite obvious but why then do many UK and some North American wine writers tell us otherwise when they talk about the better ‘savoury’ qualities of Rhone wines?

I do think the technological gap which was much wider, say 10 years ago when Australia had a big advantage, has closed. Note I am not referring here to the intrinsic flavour of the grape but rather what the wine maker does with it.

Lastly it is apparent that many countries now provide agreeable drinking wines at similar prices. The only advantage will be the price at which the producer can supply the large supermarkets and this still rests with the large, mechanised, new world producers. French country wines are too expensive on any meaningful price to quality ratio plus they were the main culprits with faults. They do not offer compelling reason to buy them.

Views on Retailing and Supermarkets

As for supermarket wine sales, well they just continue to grow and the top nine chains, such as Tesco, Waitrose, Asda etc now sell over 80% of the off licence wines. This is most disturbing for the freestanding, high street wine shops. What is their future role to be? A limited number can deal with the upper end, but will there be a need for those I was buying from which sit in the middle level? It is also very confusing as for years I reasoned that because the U.K. is by and large not a wine producer that ‘independents’ would retain a strong role.

In Australia I took the opposite view, and this goes back to the early 1980s, that supermarkets would totally dominate the trade. Since everyone purchased from the same range of local suppliers, the supermarkets had to finally win with greater buying power and dominance of the customer traffic. This is indeed happening and the only thing slowing this down is the various state licensing regulations that make it difficult for supermarkets to become licensed outlets. Their domination though will continue to grow.

This is how I reasoned the future for the U.K. high street store. Suppose you had a shop not far from a large chain supermarket. As chains buy on a huge scale you would find it hard to match them on price. But the high street outlet had an advantage, as mentioned, that the independent Australian retailer does not have, which is they can source worldwide and find any number of wines that the local supermarket does not carry. Many of these would be competitive in price.

The other advantage would be to tell customers why they were unique, meaning selling the idea of the wine merchant which guarantees better quality. To use a specific example; just because the supermarket has a few Beaujolais this does not mean you do not stock Beaujolais, you simply cross the channel select one you like from the thousands of makers, and tell your customers yours is much better. Often the high street could compete on price and it was not long ago that there were multiple chains so they did have buying power.

That was the theory but in practise it did not work. Yes I realise there are some successes like Majestic but tell me what happened to Oddbins, Threshers and numerous others. They were thrashed, that’s what happened. Oddbins is being revived again so I had a good look at a few shops and the chances of this brand regaining the heady days of the ‘Ralph Steadman’ catalogues is 1 in 10.

What this shows is that no matter how appealing the high street offer may be it is no match for supermarket buying power, unrelenting marketing, and being able to control the customers. The shopper is happy without the advice an independent can offer, and in any case in my experience only a tiny percentage ever ask for advice. Also shoppers are not convinced that the independents wines are any better. Plus the price gap never closes but grows.

All things considered shopping at a supermarket is so much easier. This is also showing up in food sales with the growth of prepacked meals demonstrating that many of us find it’s so much easier than cooking for ourselves. Those who make their living from writing about wine may want to pause as few are listening in the U.K. and in Australia the buying pull of say a recommendation from James Halliday stopped about 20 years ago. It is very easy for the U.K. consumer to convince themselves that the supermarket wines are just as good and cheaper. Indeed they may well be right as my experience at the Whole Foods store on Kensington High Street was that their good buys were twice the price as those from the nearby Tesco Express.

The sad truth is that the number of those who do look for small and interesting wine producers and the shops that sell them are shrinking and there is less and less custom to go around.

Views on the Alcohol of Wine

Consider the false debate the U.K press has thrown up about excessive alcohol and how Australian wines are too alcoholic and must change. Perhaps they should ask what the alcohols of the 2009 Bordeaux are, the product of a hot year? I recorded the alcohol of all of the wines I drank (yes I know they are only approximations) and this combined with much else I have learnt over many years suggests to me that Australian wines are on average about 1% higher than the average European wine. Comparing the best wines of both places the difference shrinks to about 0.5%. The reds wines I enjoyed the most were often from the Rhone and most had alcohols similar to warm climate Australian reds.

How can anyone raise concern about this and how can anyone tell the difference? A case of blind prejudice at work that I believe started with some U.K supermarket buyers saying they were responding to a trend from their customers. This was picked up by a few U.K. wine writers who should be ashamed of themselves.

Foot note: I purchased few expensive wines thus make no comments on the relative merits of Bordeaux or Burgundy which in any case now reside in a ‘never- never land’ long since divorced from what is a good drink for the price.

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