Leading the way
A stand-off between the liquor industry and those supermarkets that use beer and wine as a weapon in their battle for market share has spilled over into the Australian Senate.
It began last month when Fosters refused to supply Coles and Woolworths with certain brands of beer they planned to sell below cost. Fosters then sent staff armed with company credit cards to buy back as many bottles as they could of its A$65 2008 Penfolds Bin 389, the classy red that Coles' First Choice bottle shops were offering at A$37 a bottle, A$6 under cost.
Not only had Fosters had enough, but Ross Brown, one of the wine industry's most respected figures, described the practice of selling wine at a loss to get more customers through the door as "retail buggery".
The supermarkets are not just putting pressure on their suppliers, including winegrowers, by selling what are known as loss leaders at their First Choice (Coles) and Dan Murphy's (Woolworths) bottle shops, but Brown says they are also threatening the existence of independent and corner-shop bottle stores. "Lose them and we will end up with a duopoly in the country, and that is in nobody's interest."
Such is the furore that a Senate committee formed in February to investigate the impact on farmers and the economy of milk discounting by the warring supermarkets has now been widened to include alcohol.
Which raises the question: should and could this also happen here? I for one am not about to hold my breath.
In New Zealand, the relationship between wineries, particularly the bigger players, and the Foodstuffs and Progressive supermarket chains seems a bit cosier, probably because the competition between the supermarkets does not appear so fierce and they do not usually use premium wines such as Bin 389, also known as "Baby Grange", as loss leaders. Supermarkets here do sell wines for less than cost – although it's not always clear whether it's below their cost or the wineries' cost of production – and discount others heavily. They also happen to be the wine industry's biggest domestic customers.
And very handy ones when you're trying to clear the decks of excess wine, even at bargain basement prices, as New Zealand wineries have been doing.
Which brings us to the burning question, for the average punter anyway – what happens when supply and demand are back in balance? Does that mean an end to cheap wine in supermarkets and elsewhere?
No. As American writer Eric Arnold points out in a recent Forbes Magazine: "Part of being a globally accepted wine region, by definition, means having a select few brands that command top dollar; a wide middle tier of affordable, drinkable wines; and a lake of questionable-quality wine that somehow finds its way into an open mouth with questionable taste. That's just the way it works."
Some new, affordable, drinkable wines (with recommended retail prices): zRussian Jack 2010 Martinborough Pinot Noir 2010 $25: Named for a swagger who tramped the roads of Wairarapa years ago, this is real little charmer. Smooth as a baby's bottom and loaded with cherries. At this price it's a very smart buy.
Terrace Heights Estate 2010 Marlborough Sauvignon Blanc, $18: A Marlborough sauvignon blanc that doesn't numb the senses but still delivers a mouthful of what we've come to expect from this part of the world. Softer. Very drinkable.
Distant Land 2010 Marlborough Pinot Gris, $20: A well-priced pinot gris with good texture and taste from Lincoln Wines in Henderson. An attractive mix of pear, nectarine and quince. Rich and fresh. Medium-dry.
Pencarrow 2010 Martinborough Chardonnay, $20: A crisper, citrus-driven chardonnay with that touch of elegance which is the hallmark of all of the wines made by Allan Johnston at Palliser Estate. This is a good value, drink-now model.
Redmetal 2009 Hawke's Bay Merlot Cabernet Franc, $15-$20: This is an old faithful among those who enjoy an easy-drinking, soft and cuddly food-friendly red. Plenty of plums.