A growing number of independent bottle shops have signed deals with Foster’s Group Ltd, effectively giving up some of their floor space to the beer and wine giant in return for new refrigerators.
A growing number of independent bottle shops have signed deals with Foster’s Group Ltd, effectively giving up some of their floor space to the beer and wine giant in return for new refrigerators.
Called The Wine Bar, Foster’s plans to install more of its custom-made fridges and storage facilities at independent outlets this year, following a successful trial at three Western Australian outlets three years ago.
It’s a move aimed to increase Foster’s slice of the wine market in WA, following a tough period 12 months ago as it struggled to integrate the Southcorp wine business.
WA Business News reported last week that Foster’s is increasing its presence on several wine lists in WA by winning support from restaurateurs through the provision of financial incentives and additional sales and support services.
Both Foster’s and several independent bottle shops view the introduction of The Wine Bar as a win-win – Foster’s pays for additional infrastructure and, in return, it claims the fridges can increase a retailer’s wine sales by up to 25 per cent per year.
That has some small boutique wineries worried they will either lose market share to Foster’s or be squeezed out of independent liquor stores.
These independents are critical to distribution because the smaller wineries are often locked out of the stores owned by the big supermarkets due to volume requirements.
There has been speculation in the wine industry that the deals struck with Foster’s go further than just a fridge, however, and include caps on the amount of non-Foster’s wine that can be sold in the bottle shop.
However, neither Foster’s nor several independent bottle shop owners that have signed a contract for the Wine Bar confirmed this was the case.
Inglewood bottle shop Devine Cellars has signed a two-year contract for a Foster’s Wine Bar.
Devine Cellars’ Steve Colangelo said a significant expansion of its premises, due to be completed in October, meant it could accommodate the Foster’s fridge as well as stock a wide range of wines from smaller operators.
Mr Colangelo said the new Wine Bar would allow the store to cater to a broader market, but he would continue to support small wineries.
“Boutique wines are the only way we are going to survive,” he said. “We can’t compete on price with Coles and Woolworths, so we have to offer something different.”
Connolly Liquor Barons proprietor Paul Douglas said the introduction of a Foster’s Wine Bar in June had solved his problem of needing to install a new fridge. He said he could now stock a bigger selection of wines because he had more space to do so.
Mr Douglas said Foster’s had not attempted to try and control the wines it sold other than requiring the Wine Bar to be stocked with Foster’s product.
Foster’s WA regional manager Dean Turner said 20 wine bars were rolled out in WA last year.