By James Atkinson
News of Moët Hennessy’s move into online retailing of its products attracted unprecedented web traffic to TheShout on Friday, illustrating that suppliers selling direct to consumers remains an emotionally charged issue for the liquor industry.
Veteran retailer Mal Higgs told TheShout that the issue of suppliers selling direct to consumers has been around for decades.
“What has usually happened is that once a supplier recognises that they cannot do the job as well as a network of retailers, they have tended to abandon the practice,” he said.
“From a retailer’s perspective, the issue really is one of principle – why should he or she support a supplier who is actively competing with them for the same consumer?”
Higgs said retailers are making decisions every day about what they range, how much they buy and how they will promote to their customers.
“Obviously there are many considerations that make up those various decisions, and one of them would inevitably be what they think of the policies of the supplier they are choosing to support,” he said.
Higgs said he could understand the amount of retailer angst about Moët’s decision to sell direct.
“When a supplier is selling a product like Moët at a price that is actually lower than most retailers pay for it, you can expect them to be upset and take whatever action they deem to be appropriate,” he said.
“At the end of the day, retailers and suppliers should be working together to deliver products and services to consumers in such a way as they can all make some money."
Some liquor retailers are also aggrieved by a new direct-to-consumer wine retail website that has the backing of the Winemakers' Federation of Australia (WFA).
Surely the noise surrounding this issue must be about something more than to quote Mal Higgs ‘one of principle – why should he or she support a supplier who is actively competing with them for the same consumer?’ I could see retailers concerns if Moet’s new site was selling these products cheaper than most retailers but the bottom line is they’re more expensive. Why more expensive? Believe it or not they are looking out for the retail liquor trade by promoting their brand’s real value! By executing what looks to be a clever strategy designed to build their brand’s prestige appeal to consumers while setting a more realistic (higher) retail price points than we are seeing caused by aggressive discounting and grey market imports. Bottom line if they are successful more consumers will buy their brands from retailers at higher prices because of what the brand means to them not just wait for a discounted price benefiting retailers with increased margins.
What is the real intent of Moet creating a world wide web strategy with detailed information of all their products,a price point and a direct to customer delivery module……?
Moet’s on line pricing has already been stated as aggressive, below cost and below a margin that justifies its position in a retail or on premise environment!
Is Moet a retailer or a producer?
Andrew McCarthy, you may want to have another look at the site as there is a misapprehension about the site’s pricing.
Ruinart Blanc de Blanc – 6 bottles for $89.99 a pop including free delivery. Can ‘most retailers’ match that?
What about 6 bottles of Moet Nv at $54.99 with 6 FREE flutes valued at $140 freight free. Can ‘most retailers’ match that?
Or 6 bottles of Veuve for $59.99 including shipping when their ‘wholesale’ price is far in excess of this.