Friday, April 26, 2013

Wine in Supermarkets? A bad idea for wine lovers.

SPIN: Changes to liquor laws will allow wine-lovers like you to buy South Australian boutique wines from underdog independent supermarkets.

FACT: The proposal will also allow Coles and Woolworths, which already claim massive market share of both grocery and liquor sales, to sell home-brand and non-SA wine in high volumes at discounted prices.

I have posted my submission to government plans to allow supermarkets to sell wine. For the record I think this is a very bad idea. If you agree please look at the website www.letsdrawtheline.com.au for information on how you can help. 


# Lets Draw The Line is © 2013 Authorised by SA Liquor Stores Association Inc. & the Australian Hotels Association (SA Branch) on behalf of Independent Liquor Retailers in South Australia. We are not formally associated with this campaign.  


Dear Member of Parliament,

I am wishing to express my deep concern about the current proposal to allow supermarkets to sell wine.

This proposal will open the floodgates for Woolworths and Coles to put alcohol in their aisles, as well as in all the bottleshops they already own.

And history says they’re not going to be looking after the small, independent South Australian wineries. They will obviously fill the shelves with brands they own and the top selling brands no matter where they come from. The draft legislation says wine in supermarkets can be any type, from any region, any state or any country. The Minister John Rau acknowledges he cannot legislate any other way. 

Allowing supermarkets to sell wine will mean a continued and increasing flood of New Zealand and Chilean product in cleanskins and own brand because of the continuing strength of the $AU. It will be retailed at between $6 and $12 and will further dumb down the local industry.

Plus, they will be selling liquor next door to independent family-owned bottle shops and hotels, who already stock SA wines. A move that will put the livelihoods of these small family businesses under greater pressure if not force them to lay off staff or close their doors for good. This new ‘competition’ will see the exit of specialist pro-local wine shops, the very operators who support SA wines with selection and advice. Add in the added power of a petrol/docket reward it’s hard to see any benefit to the wine industry. 

As many experienced wine industry marketers concede it will just get harder to sell local wine. 

I am opposed to putting our local wine industry in the hands of big retailers with a poor track record of fairly competing with smaller, local businesses. Bottle shops and pubs for liquor. Supermarkets for groceries.

Regards,

James Hook

2 comments:

Tony Keys said...

Tony Keys - The Key Report

It appears TKR cannot see eye to eye with South Australian wine producers over the licensing of South Australian supermarkets to sell wine.

Last week we wrote: “It’s hard for TKR to work out why the possible licensing of smaller supermarkets [our mistake, as it’s now all supermarkets] in South Australia should be the prompt for, ‘McLaren boutique wineries are banding together to combat the impact of proposed laws which could lead to supermarkets selling wine’, as reported in The Advertiser this past week.”

TKR put forward the opinion that wineries from any SA region should already be involved in marketing themselves using the internet and social media. If they are not building relationships with consumers direct, they are missing out. The hysteria surrounding supermarkets getting licences is rather childlike.

It’s good to see Hook stands by his quotes.

The Draw the Line site is under the control of the SA Liquor Stores Association and the Australian Hotels Association (SA branch) on behalf of Independent Liquor Retailers in South Australia. Follow the link and read:
• The State Government wants to allow supermarkets to sell wine.
• They say it will help the local wine industry.
• We support SA wines but this proposal will open the floodgates for Woolworths, Coles, Aldi and the big grocery groups to put alcohol in their aisles, as well as in all the bottle shops they already own.
• And history says they’re not going to be looking after the small, independent local wineries. They will simply fill the shelves with brands they own.
• Plus, they will be selling liquor next door to real, independent family owned bottle shops and hotels, who already stock SA wines.
• Guess who will have to close or lay off staff?
• Let’s draw the line.
• Bottle shops and pubs for liquor. Supermarkets for groceries.

Hook doesn’t think this is hysteria? He says it doesn’t affect Lazy Ballerina as the vineyard is dealing direct with consumers. Therefore, is it really a concern of his? Should he not be helping other small vineyards achieve the same consumer interaction?

Information that TKR has obtained and believes to be reliable shows there are 238 unlicensed independent supermarkets in South Australia. Only 7 per cent of independent supermarkets are licensed.

Although the original government press release defined a maximum shop size of 400 square meters and South Australian bottled wine only, the Minister, John Rau, had to withdraw these restrictions as they contravened the current law.

Hook is correct that the big supermarkets could buy wineries and sell wine themselves, but he lives in a land of free enterprise. Does he not accept the benefits of doing so? It should also be noted that as far as TKR is aware, neither Woolworths nor Coles have involved themselves in this issue, as most of the stores have adjacent bottle shops already. Why on earth would either supermarket want the hassle of running 50 small vineyards, or even one?

The real driving force behind the campaign is not the wineries. TKR sees Hook being used as a puppet by the Australian Hotels Association. Read the Q&A on the Draw the Line site and it can be seen clearly that the AHA is very much looking after its members. It doesn’t care about wineries.

The wine industry whinges about Coles and Woolworths controlling such a high proportion of wine retailing in Australia. Yet it doesn’t want IGA or Aldi to have licences that will dilute this dominance.

There is an element of headless chickens about this situation. Wineries are being manipulated. Work harder on direct sales to consumers and let AHA front its own battle.

A similar issue is arising in Queensland with the State Government releasing Discussion Paper Liquor licensing reform – sale of wine in supermarkets.

There is an amount of irony in this as both Coles and Woolworths hold many hotel licenses in the state. How will they react? As hoteliers or supermarket owners?

James Hook said...

Dear Tony,

Thanks for publishing my comments TKR and elaborating your point of view.

For clarification I am not a puppet of the SA Liquor Stores Association and the Australian Hotels Association (SA branch), I realise you weren’t directly suggesting I was, I do refer people to their website as it allows easy submission to the government on the issue. I have never spoken with anyone behind the campaign, I just shared the sentiment.

I do go into pubs though!

“He says it doesn’t affect Lazy Ballerina as the vineyard is dealing direct with consumers. Therefore, is it really a concern of his?

Should he not be helping other small vineyards achieve the same consumer interaction?”

I try my absolute best for my region through volunteering my time to project like McLaren Vale - Sustainable Winegrowing Australia. I would love to talk to you about that some time if you are interested.
I was asked to comment in the media I assume because they read my blog. I am happy to give you any comments or information if you ever need it.

Interestingly Warren Randall gave a talk in McLaren Vale this week and address wine in supermarkets. In his opinion wineries should either export, or join with supermarkets either by selling off production assets or making brands under license. He feels supermarkets will total control and conventional distribution is dead. As you said in your article “Work harder on direct sales to consumers.”

Regards,

James Hook.