Thursday, 26 November 2009

False Wine Promotions

The public have been warned against false price promotions on wine for quite some time now, but the practice still continues. I have been researching this and found an article in the press over 3 years ago, and I reproduce a snippet of it below.

Supermarket shoppers are being ripped off by bogus 'half-price' deals on millions of bottles of wine, a leading drinks boss has warned.
High street giants are misleading customers who think that they are getting a great deal but are actually just paying the correct price, according to Jean-Manuel Spriet, chief executive of Pernod Ricard UK.
The practice of 'marking up, only to mark down' has been rife for years, according to industry experts. The supermarket pretends to be offering a 'great discount' on a £7.99 bottle of wine, but the real price of the wine is £3.99.
'They make the wines designed for sale at £3.99, introduce them at a higher price, and then bring the price down,' said Mr Spriet.
'They start at £7.99 and are discounted down to half price which is crazy.

This article was in The Daily Mail, but over the years there has been similar comment in The Telegraph, The Observer and The Times amongst others.

Do not be foooled by these false promotions - what I like to call "The DFS syndrome" - if you are paying £3.99, you are getting a £3.99 wine - not a £7.99 wine at half price.

Another misleading type of promotion was the one that was prevalent in Threshers/Wine Rack/Haddows where the offer was "Buy 3, only pay for 2". What they omitted to mention was that the single bottle price had been inflated by a third in the first place. The holding company of this chain, First Quench, has just gone into administration, so its promotional tactic obviously didn't fool the public.

And whilst I'm on the subject of false promotions, do not be taken in either by the "Half Price" case offers in the Sunday Supplements by many of the larger mail-order retailers. Do you honestly believe that a company could afford to lose half their revenue, and pay the large amounts needed to advertise in the Weekend Press? Of course they couldn't - the wines were never that price in the first place - well strictly speaking they had to be by law - but it was still a false figure solely for the purpose of halving it later.

On our website the reductions are shown against the price that we have seen charged for those wines previously. No false figures - just genuine reductions.

Thursday, 12 November 2009

7th Continent Wines

Diageo is the world’s biggest drinks group with brands such as Johnny Walker, Baileys, Gordon’s, Guinness and countless others that are almost household names. Being formed from takeovers and mergers between spirits producers and breweries it never really had a presence in the wine market. That was until 2006 when it sent eyes rolling in sockets all over the drinks world with the announcement of a new Australian wine brand. In a retail environment ever more dominated by multi-nationals and multi-grocers, the trade could have been forgiven in thinking that it needed another million-case monster like a hole in the head. Bearing in mind however that Australia has been one of the most dynamic wine performers of the last decade, particularly in the UK and US, the lack of an Aussie wine in the group's portfolio had been glaring.

The name chosen for this brand was “7th Continent”, obviously identifying Australia, but Diageo surprised the trade even more by the totally different marketing strategy adopted. For a start it wasn’t a big, sweet, blowsy Blossom Hill type range with a Bush Tucker hat. Additionally Diageo eschewed the accepted wisdom that a brand needed to launch at 'entry-level' with two or three varietals, then move consumers up through a succession of reserves and premiums to some notional winemaker's indulgence. No, they went straight in at a £7.99/£8.49 level, but not as many other brands had done at this level just for the contrived purpose to be "Bogged Off" (BOGOF - buy one, get one free for the uninitiated) in the future to generate sales.

There were eventually up to 15 wines in the range, but the wines were not inter-regional blends of the sort that powered Australia to its dominant position in the UK, but were specific regional expressions. Here wine drinkers could compare and contrast Cabernets and Merlots from several individual regions, and see how a Hunter Valley Shiraz, a Clare Valley Riesling or an Adelaide Hills Viognier were far superior to multi-regional blended wines.

Diageo consciously wanted to make consumers reassess what they knew about Australia; to readdress the 'deep-cut, gondola end' imagery that had hurt the country's image over the last few years and to provide a trade-up brand for younger wine drinkers who came into the category through Australia, but had migrated elsewhere when looking for a special occasion wine.

The thinking was logical, laudable even – yet despite getting listings with Threshers, Tesco and others, the brand ultimately failed. Probably because the whole 'Brand Australia' hype had sunk deep into the psyche of the wine-buying public all over the world, getting across the regionality message proved hellishly difficult to achieve. Market research can show all it likes about consumers wanting a new, more upmarket Australia, but there's a big difference between the focus group and the supermarket aisle.

Their loss is our gain though, as is now able to offer some of this range at prices showing up to 40% less than the original prices. The original prices were genuinely in the £7.99/£8.49 range – not the false levels one sees everyday in supermarkets in the “Was £7.99 – now half price at £3.99” offers. As has been stated here and in the national press, such “half-price” offers are totally false – all of these wines promoted in this manner have been specifically produced to sell at £3.99 in the first place.

So, forget Lindemans, Hardy’s, etc and all the other multi-regional blends – experience the taste of regional Australia and see how trading up can bring you far better wines with individual characteristics. Except with our discounts, you don’t have to trade up in price.