Wineries risked losing brands over bulk wine fiasco: expert

Quick response by two of three companies helped them: professor
 
Canada's largest wine companies risked losing brands they have spent years building up by selling bulk imported wines as B.C. products, a Simon Fraser University marketing expert said Friday.

The prompt response by two of the big three companies to revelations that wines being sold as B.C. wines were, in fact, bulk imports was the best way to put the controversy to rest, said Lindsay Meredith, marketing professor at Simon Fraser University's faculty of business administration. They have probably saved their brands.

Vincor Canada and Andrew Peller Ltd. announced Thursday they were changing labels on their so-called Cellared in Canada wines to make them more descriptive of their foreign origin. The company CEOs pledged to be more open about their labelling practices.

The new labels are expected to be in place before the 2010 Olympics. Meredith said the Vancouver Games likely provided the stimulus for the sudden policy change. Vincor is the official supplier of wine to the Games.

"If you had a whiff of any competitive difficulty associated with your brand name, you would be having a chat with the Olympic boys very, very quickly," Meredith said.

Meredith said his "hat is off" to the wineries for responding quickly to news stories about their wines.

"This is exactly what you teach in senior level marketing courses," he said. "Don't dog it. Don't stonewall it. Point out that you made a mistake. That you are out there to fix it and I do mean fast.

"They just got a lot of respect from me."

The third wine company, the Mark Anthony Group, owner of Mission Hill winery and its bulk wine brand Artisan Wine Co., has not responded to interview requests. Artisan sells brands like Sonora Ranch and Mission Ridge.

Eric Morham, president of Vincor Canada, told The Vancouver Sun editorial board Thursday that his company's Jackson-Triggs brand appeared to be hardest hit by consumer backlash. It carries the Olympic logo. Cellared in Canada wines are the main business for Jackson-Triggs, he said, but it also makes Vintners Quality Alliance wines made from 100-per-cent B.C. grapes.

"It has been written about and focused on a few times. We will have to see what happens to sales. I hope after building the brand for 20 years it's not damaged because brand equity is very hard to rebuild," Morham said.

Wine stores contacted by The Sun said sales of the bulk wines by the big three wineries appear to be down, and consumers are seeking out 100-per-cent B.C. wines instead.

John Clerides, owner of Marquis Wine Cellars in Vancouver, said he doesn't intend to stock the wines any longer. He sells about 300 cases a year.

The move by the two wineries received support from retailers. Kelowna's Suzanne Mick, co-owner of Discover Wines, said the two wineries took a big step.

"It sounds like we are moving towards truth in labelling."

She said her store, which sells only 100-per-cent B.C. wines, had seen an increase in business since the wine labelling issue blew up two weeks ago.

"I think they have seen plummeting sales," she said of the big wineries.

The next step in clearing up the mess over the bulk wines is up to the provincial Liquor Distribution Branch, which continues to sell the wines under its B.C. Wines sign, said Mark Hicken, a lawyer who specializes in wine law.

"The significant issue now is marketing within the stores. That's where people are more likely to be misled," he said.

Rich Coleman, minister responsible for the LDB, has promised changes in the way the wines are displayed, but he is leaving it up to the LDB to work it out.

Hicken said if the LDB is serious about making changes, it could be done within days. Just move the wines out of the B.C. section, he said.

"I don't see how that would be very difficult to fix."