Those who follow wine closely may have already begun to notice dwindling choice for consumers at several restaurants, pubs and some independent bottle shops.
Those who follow wine closely may have already begun to notice dwindling choice for consumers at several restaurants, pubs and some independent bottle shops.
Those that are not so familiar with the range of wines controlled by one company are probably yet to realise that, on some wine lists in Perth, the only choice on offer is a selection of brands owned entirely by one company.
There is talk of big incentives being offered to gain ultimate control of the wine list.
Consumers may think they are choosing between a chardonnay from one wine company and a sauvignon blanc from another, but both brands ultimately have the same owner.
According to one boutique winemaker spoken to by WA Business News this week, the control being exerted by the likes of Foster’s Group Ltd is gaining momentum.
The winemaker said his wines came close to being scrubbed off a hotel wine list earlier this year when the publican did a deal with Foster’s.
The boutique winery remained on the list, but only after the strong insistence of the pub’s owner. It is understood the other independently-owned wines that were on the pub’s list have been replaced by a range of Foster’s products.
That un-named venue is not the first to embrace the multi-brand company. The wine list of UK-based noodle chain Wagamama has a dozen different wines for consumers to choose from, including Cartwheel’s Margaret River Semillon sauvignon blanc, Devil’s Lair white or red blends as well as wines from Clare Valley’s Leo Buring and New Zealand’s Secret Stone.
Every wine on the Wagamama list is owned by Fosters. Not surprisingly so are all the beers.
Ian Love’s Raffles Hotel sports the Foster’s big beer brand Crown Lager on a neon sign and inside the relationship with Foster’s is just as apparent with its wine list dominated by a selection of Foster’s owned wine brands.
Those in the industry say Foster’s has stepped up efforts to boost its presence on wine lists and is even muscling in on the independent bottle shop operators after it restructured its sales team about 18 months ago.
The internal changes followed Foster’s $3 billion Southcorp Ltd acquisition and meant that one salesperson could sell across the company’s extensive beer and wine portfolio.
Prior to the change one sales representative sold a venue beer and a different salesperson sold wine.
Foster’s WA regional general manager Dean Turner said the company was operating in a very competitive market and was offering incentives similar to those offered by other wine companies.
He said the company also offered a high level of service to its clients, including employing a person dedicated to designing wine list lay-outs, which could be changed as the restaurateur requires.
He said the company was securing support for its brands by adding value to its product range including offering special wine pouring systems, which kept opened wines fresh and “save restaurateurs hundreds of dollars”.
“We are supplying additional services and we ask them to support our brands in return,” he said.
He said Foster’s had lost market share about 12 months ago but had clawed back the losses in the past six months.
Mr Turner said the group’s recent increase in market share was in-line with overall market growth.
Foster’s wine portfolio includes some of Australia’s most well-known brands including Penfolds, Rosemount, Wolf Blass, Lindemans and Coonawarra Estate.
But it also owns many other producers from Australia and New Zealand including Margaret River’s Devil’s Lair.
Industry observers have told WA Business News that Foster’s assault on the wine market is similar to what has occurred in the beer market for many years, where Foster’s and its major beer rival Lion Nathan Ltd have fought fiercely.
Many publicans choose to do a deal with either operator to gain greater financial incentives, which usually include a cash rebate for every litre of beer sold from the company’s portfolio.
WA Business News understands that the larger the selection of beers from one company that is offered, the greater the financial incentive for the pub’s owner.
While boutique wineries are beginning to get squeezed out of restaurants and pubs, a growing number of emerging Australian boutique brewers are trying to enter a market they are often already locked out of.
“They [Foster’s and Lion Nathan] have been getting more aggressive in the beer market in the past few years because there’s more competition,” said a beer industry source.
Another industry source said the big beer companies had made doing business with them financially rewarding, with a similar situation likely to unfold in the wine sector.
“Foster’s is expanding into wine and they’ll do the same thing that they’ve been doing with beer,” he said.
“The problem is that consumers are not being offered the choice because the deals are being done behind the doors,” he said.