By James Atkinson
Now that the wine glut is subsiding, suppliers and retailers should become less obsessed with price points in the category, according to Treasury Wine Estates' Chris Flaherty.
At last week's ALSA conference, Flaherty said the surplus position of the wine category had detracted from the opportunity that wine offers liquor retailers.
He said the majority of consumers love the romance, occasions, celebrations or solitude that go with drinking wine.
"We just focus on everything but those things, we focus on price, price, price," Flaherty said.
But he said market conditions are about to change, with this year's vintage in New Zealand about 25 or 30 per cent down on the previous year, and a short vintage in Australia in 2011.
"In Australia, we've seen a tightening of the supply position in the last 12 months, and we think it's going to get a bit tighter," he said.
Flaherty said this gives retailers an opportunity to focus on the experiential factors associated with wine purchasing and consumption, and to hold margins stronger over the next couple of years.
"With utilities, rent, wages – all the costs of running a store increasing like they are – I think there's a real need to revisit the margin expectations that we have," he said.
"I'd like to see more emphasis on the environment that we create in the store when shoppers go in there so that it's not just about price."
This is a bit rich coming from a company that ,over the last few years ,has has focused so much on price by giving the two big chains massive discounts and in the process has almost killed off a number of their wine labels in independent liquor outlets.
In order to survive,we (small independent stores) have learned to live without many of your products and have already replaced them with more profitable alternatives!