Wine: The real price of a 'bogof'

Supermarket own-label wine isn't usually brought to the dinner table with a flourish. Yet there was a time when the supermarkets deserved a round of applause for deflating the pomp and ritual associated with wine when they introduced their own-label bottles. The New World pushed the nail further into the elitist coffin. Before you could say commoditisation, wine was an everyday drink just like any other fast-moving consumer product. But have the supermarkets now dumbed down wine too far?

During a periodic clutter-clearing of my business address book, I noticed that the biggest single out-of-date group was supermarket wine buyers. I called Sara Brook, ex-Asda, to find out why. "The freedom we once had to experiment with a range offering choice and diversity has been reduced," she said. "As often as not, today's wine buyers are continually under pressure to drive down prices, sometimes at the expense of quality. The need for instant results creates short-term pressures that interfere with the longer-term work needed to work with suppliers. You're measured by how much you can save the company and deliver the targets, and very rarely by how much you improve the quality of a range or wine for the consumer - both are important."

Next, I spoke to a supplier of wine to supermarkets, who said he'd been told his wine would be de-listed unless he reduced the cost price from €0.80 a bottle (55p). "But I can't do a drinkable bottle for less than €0.80 a bottle," he complained. Another supplier told me that to keep his original listing, the supermarket has told him he must supply a wine worth up to a maximum of £4.99, which the supermarket will list at £6.99 and then promote at £3.49. This is the raison d'être of the ubiquitous "bogof" (buy-one-get-one-free) and the trend behind an increasing number of brands such as Hardys Crest, Kumala Zenith, Yellow Tail, Rex Goliath and Blossom Hill, whose aim is to mop up the current world wine glut and sell at an apparently reduced price on promotion.

Typically, after tax, costs and profit, a wine that costs the supermarket €0.80 (55p) goes out at £2.99, a €1.40 (99p) bottle sells for £3.99 and a €1.60 (£1.10) bottle at £4.99. Enough to satisfy a supermarket's insatiable demand for a growing margin, now on average around 35 per cent? You might think so. But pressure to keep prices as low as possible resulted in a recent letter from Waitrose, normally a model of its kind, suggesting to suppliers that they might like to absorb any forthcoming duty increase. "I blame Harris carpets," said one agent. "They started this retail monster that demands having to give something off to attract customers, and that means putting pressure on everyone from the buyer to the winemaker." This chimes with the true story of one keen young buyer who demanded a price so low that the importer said he couldn't meet the price even if he took the wine out of the bottle.

It's not all bad news, according to Lindsay Talas, ex-Tesco, and now with wine agent Thierry's. "It's true that there are deals where we raise an eyebrow," she says, "but there are some deals too where the wine does stack up. Consumers have to look cleverly to find them, mind you, for instance fitou and corbières and some reserve riojas. We're also beginning to see retailers saying the wine must stack up at the full retail price." That would be a welcome development. Wine isn't baked beans after all, but the way things are going, it's hard to see how a vicious circle of promotions and demand for low prices at all costs isn't going to stamp out the last vestige of flavour and choice.