By James Atkinson
Two of the country's biggest liquor suppliers have rejected the suggestion that independent retailers could sell more of their products and compete better against Coles and Woolworths if their trading terms were not so restrictive.
Responding to today's criticism by independents, a Diageo Australia spokesperson told TheShout there are good reasons why the company's trading terms are consistent for all customers.
"Our trading terms are essentially underpinned by strong shopper insights and proven sales drivers like quality, visibility, distribution, product and persuasion," she said.
"The overarching principle is that regardless of what shop, outlet or channel the shopper arrives in, they expect a consistency in standard and quality of their experience – this is what we recognise and reward customers for, and what we believe drives category growth."
Treasury Wine Estates Australia/New Zealand (TWE) managing director Chris Flaherty told TheShout that industry statistics and the company's own research suggests that 50 per cent of sales come from approximately 35 brands and that consumers are actively seeking out these products.
"Treasury Wine Estates is the custodian of many of these hero brands, and we know that they actively drive traffic into stores," he said.
"There is a perception amongst some retailers that ranging is a valid point of difference between competitors but consumer buying patterns just don't support this position. Stocking the brands consumers want is critical for retailers' success and that of Treasury Wine Estates."
Flaherty said TWE reviews its trading terms every year. "We will continue to do this and take feedback from our customers," he said.
The Diageo spokesperson said the company reviewed its trading terms last year to make them more consistent and transparent, "and to give more clarity on the benefits they could bring to both our customers and to our business".
"Our trading terms are updated as we see necessary to reflect the market environment and shopper insights," she said.
Wow…that sounds like very sophisticated corporate spin to help get around the fact that for an independent retailer to buy a Diageo or TWE product from a wholesaler, they pay more than if they were to go to a Coles or Woolworth’s big box store.
It’s an ongoing problem that is putting small retailers out of business, if they want to stock these “so called” hero brands!
For the smart retailer they stock quality hand crafted wine/beer and spirits from smaller suppliers that don’t sell their souls to the majors. Then offering service, education to their customers and supporting small business, both in the distributor and producer.
All transparency means is the independents can see they are not getting the same deal as the big two duds!Who espouse variety for the consumer but deliver the opposite!50% by volume I would not think equals 50% by margin .