Reporting that a new price war has broken out in the wine industry, thanks to a large 2008 vintage, increasing retail competition and the economic downturn, the Australian website news.com.au blames the brittle overseas market as the leading cause.
'The latest international problem to emerge is in UK with concerns that supermarket giant Tesco is imposing tougher conditions on wine producers. English newspapers have foreshadowed a supply revolt against Tesco which has introduced "take it or leave it" terms to protect profit margins, according to the news report. DelWine had reported it in a previous issue (#259).
Sales of premium bottled Australian wine on the domestic market are down by more than 4 per cent for the past 12 months, while total Australian domestic wine sales are down about 3 per cent.
Here are some of the special offers in Australian dollars: Angove's Long Row Sauvignon Blanc for A$7.99 a bottle (normally ($9.99), Peter Lehmann Shiraz A$13.99 ($19.99) and Rosemount Diamond Label Shiraz A$9.99 ($14.99).
Australian Wine and Brandy Corporation manager, information and analysis, Lawrie Stanford said the credit crisis had started to bite in the past quarter. "Prices are also pushed down by increasing competition between retailers and a large 2008 vintage." he said.
Future of Bag in the Box Bleak
The price reduction and the credit crunch does not mean that there is a growth in the cheap wine market. Another report from Down Under suggests that the share of the cheap 'bag in the box' has been declining steadily.
"Bag in a box" wine was first marketed to Australian consumers in the late 1960s and became popular in the following decade because it was cheap and had a long shelf life. But sales have been flat since the mid 1980s and in 2005; it lost its lead over bottled wine. From 60% the market share has decline to less than 40% now.
Foster's Group which produces Penfolds, Lindemans and Rosemount in this packaging is reportedly making a strategic exit from this packaging concept.
Bag in the Box was never accepted in India despite a push by some companies. It always portrayed the image of a cheap wine, and no producer making quaffable wine ventured into this packaging although, Indage has introduced Vino-the bottom of the low-end table wine in a plastic PET bottle.
Importers who are generally toying with the idea of introducing such wines due to the cheap costs might take a clue from this decline in the market share before deciding to import this packaging. |