03/03/2011 - 00:00

Quality focus to combat wine squeeze

03/03/2011 - 00:00

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Independent retailers are using brains over brawn when it comes to making a splash in the wine market. Emily Morgan reports.

Quality focus to combat wine squeeze

The ‘consumer experience’ of visiting your local, independently run bottle shop is worlds away from shopping at the expansive, bargain basement bottle marts operated by supermarket giants Coles and Woolworths.

The most obvious is the sheer size of bottle warehouses such as the Coles-owned Beer Wine Spirits (BWS) and Dan Murphy’s, which has seven locations in Western Australia from Mandurah to Perth and prides itself as having a ‘lowest liquor price guarantee’.

And Mr Murphy isn’t kidding. On the website there are 71 wine varietals under $5, the cheapest a $2.40 bottle of Lindeman’s shiraz.

These prices have slowly been edging independently owned competition out of the market, with many operators opting to go under banners such as Liquor Barons and Cellarbrations, according to Menora wine store La Vigna owner Michael Tamburi.

Mr Tamburi says La Vigna is one of the last ‘genuine’ independent retailers. His biggest concern with the large conglomerates swamping the market is not the increased competition, but the oversupply of ordinary products and undersupply of premium wines.

“I am not overtly concerned because I am totally different in the services I am providing,” Mr Tamburi told Gusto.

“It has affected me ... but that is why we diversified our range 30 years ago.”

Most concerning, Mr Tamburi says, is the effect on the producers and consumers.

While production and labour costs have steadily risen during the past five years, the ticket price of wine at large chains has pushed wine quality down, and ultimately it is the people making and drinking the wine who lose out.

“I get offers for wines every week 20 per cent cheaper than what I got it for four or five months ago because people are just desperate to move their produce and the big boys are just squeezing them,” Mr Tamburi says.

Close by La Vigna, in the nearby suburb of Mount Hawthorn, is independent retailer Paddington Fine Wines, where manager Sam Randell says he no longer attempts to compete on price.

“We can’t compete in terms of prices with them, you have got to get something in that they don’t have,” he says.

“We try and steer clear of what the bigger chains have, like BWS, Liquor Land and Dan Murphy’s. They sell their private labels and the every day run-of-the-mill cheap stuff.”

Instead, Paddington Fine Wines focuses on stocking the shelves with new and different products; the store has developed a range of 141 local and international beers, 50 Cuban and Dominican cigars and close to 1,000 varietals of wine.

“The most expensive spirit we have is a $3,000 cognac, so it is stuff that no-one else has got,” Mr Randall says.

As a result, Paddington Fine Wines’ customer base is proving to be loyal.

“They know when they come in here they can try the wine on a Friday night, they can try different things and we always have new products coming in,” Mr Randall says.

Mr Tamburi echoed the sentiment and says La Vigna’s extensive range of 21,400 different ‘lines’ of wine entices a loyal customer base.

Mr Randall also has concerns over the producers, and says smaller producers and wholesalers are turning to independent retailers, with large chains favouring a standard range.

“I deal with a lot of smaller wholesalers, smaller producers, and smaller companies,” he says.

“As a retailer we are lucky in all the choices we get. As a producer, I don’t know how you would survive. They can’t get a look in with the big guys, so they have to look at independents like us.”

Mr Randall points to the recent milk stoush and the way the petrol market has changed, and says something should be done to protect the local industry.

“I think it is a really big bug bear, the more Dan Murphy’s that come through, it is a real concern,” he says.

“I really think the government should be looking to step in. I think the way it is heading is similar to the petrol market. Why shouldn’t you be able to choose something outside of the square if you want to?”

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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