Australian Wines And The Powerful Supermarket Industry

Sarah Collingwood from Fourwinds Vineyard in the Canberra region has been in touch re: the big supermarkets and Australian wines. Coles and Woolies are now Australia’s largest wine retailers. They are developing exclusive wine brands and selling them at very low prices.

On a new website that tells us ‘Who makes my wine’, Sarah says:

“If you are walking around your local BWS, Vintage Cellars or Dan Murphy’s store and wondering who makes which wines, here is a list of wines made by Coles and Woolworths under their private labels.

Rather than labelling these wines ‘Woolworths Select’ or ‘You’ll Love Coles’, the wines look like they are produced by a winery-owned brand with names like Daybreak Estate, Amiri and Crittenden & Co.

As a small vineyard and winery I will declare my interest in ensuring there is some shelf space left for branded products, but as Coles and Woolworths control 45% of the retail liquor market, I believe it is in everyone’s interest to ensure that by 2015 the liquor industry is not ‘totally absorbed by the supermarket industry’ as suggested in an IBIS World report.

Coles and Woolworths control around 1350 outlets under the banners of Liquorland, Vintage Cellars, Theo’s, 1st Choice, Dan Murphy’s, BWS and Woolworths Liquor.

According to a quick scan it seems they have around 100 private labels between them. These private labels reduce potential shelf space for genuine growers and producers and allows them to be ultra price competitive as they have removed the middle man.

The wines are not bad, as described in an article by Max Allen in The Australian as he blind tastes some of the private labels against some of the leading wines in their categories.

The list might be incomplete, some of these brands might be spirits or not on the shelves yet. Let me know in the comments, I am happy to update.”

Check out the list.

Comment From the Wine Industry

Stephen Strachan of the Winemakers’ Federation of Australia, says:

“We have a situation now where our customers [the supermarkets] are also our competitors..
We believe that private labels simply take market share from our members’ existing labels, undermine the established brands and make it harder for us to clear the oversupply of wine afflicting the industry.”

Comment From Coles Liquor

Grant Ramage from Coles Liquor says:

“I think [Strachan] is incorrect in claiming that our private labels are depriving producers of opportunities and exacerbating the wine glut..
On the contrary: at the budget-priced end of the market we are a large part of the solution in selling through the excess, through our brands and supplier-owned proprietary brands.”

I say let’s give the consumer the info and let them decide…