Man O'War Gravestone Sauvingon Blanc 2010 Waiheke Island

RRP $32 Countdown $43

On my recent search for my Sauvignon Blanc Summer Series, forgetting Summer of Riesling, I wondered down to my local supermarkets to pick a few wines to review. On scouring the aisles I was appalled to see wines being sold at more that 30% above RRP only for them to probably slash the price by $10 so they still make full retail margin.

These tactics are destroying the traditional wine stores, and with the closure of Rumbles last week, it’s hard not to be pessimistic about traditional retail outlets.

With the perception from the public that supermarkets are the cheapest place to buy wine price gouging is commonplace amongst the behemoth duopoly. It was in 2009 that the two major supermarket chains invoked a voluntarily decision to ban the use of any alcohol product as a loss leader in stores, but nothing was said of the humongous profits they make from wine at the expense of wineries.

Whilst this practice may have stopped, although it would certainly appear that there are some dubious pricing structures, alternatively wineries maybe giving their wine away!

I understand business dealings within the industry, and that many wineries are suffering and supermarkets are the only places that shift the volumes required to make the industry profitable, but at what cost?

Some retailers are hard at work online, and offer very competitive prices and are generally cheaper than supermarkets. With limited overheads needed to run an online store for every other industry, the online wine shops need a bricks and mortar premise to be able to sell wine.

Independent wine retailers return 60% more into their local community than large multinationals. They tend to use local accountants, graphic designers, staff, and tradespeople. This independent model is more sustainable for the local community than another supermarket. In Britain Tesco’s accounts for over 50% of all high street sales, not an attractive model with New Zealand being built on small to medium business.

RRP $30 Countdown $39.99

It would now appear, and I not one for telling retailers what they can charge for wine, that many supermarkets grossly inflate wine prices so that they can slash the price to the RRP. Many consumers look for the best valued price wine without a care to who made it and its true value.

Many shoppers tend not to be that well-versed in lesser known wineries and often go for promotions on the  wine brands they’ve heard of. With nearly 90% of all wine sales in NZ going through Supermarkets, it’s hard not to imagine this figure not increasing, more traditional retail outlets going bust, and wineries being being further squeezed on price.

Wine writers are also to blame. For a large part they recommend wines that can be found in supermarkets, and also big brand wines. This compounds the problem for the small retailers and makes selling wine into supermarkets, for wineries, a necessity.

With the dollar rising against all the major currencies, an uncertain European financial future, it’s hard to see the New Zealand wine landscape experiencing dynamic growth for the foreseeable future. This situation plays directly into the hands of the supermarkets who can shift volume and become a necessary evil.