Looking in on the British wine market.
Looking in on the British wine market.

Winegoggle correspondent David Finlayson from Edgebaston Vineyards reports on the state of play in the United Kingdom

What’s up in England?
Other than the nether regions of those English cricketers, who still cannot stop trumpeting about their win in the Ashes, not much it seems! In fact, the UK – and in particular its wine market – is the most depressing it has ever been in decades. Not the most inspiring wine market at any time in the past, horribly oversupplied, overtraded and dictated to by the supermarkets, the UK wine trade just doesn’t seem to know what the hell it must do to get going again.
Once the gentleman’s perfect place to cellar, sell and buy claret, Burgundy and port from small independent retailers, the members of the UK wine trade now seem to spend all day talking, milling around and not actually getting much done or at least not knowing how to get back to the glorious days of the 80’s and 90’s.
What’s the reason for this you might ask? Well, of course there are a number, but firstly one has to lay a bit of the blame at the feet of the Aussies and to a lesser (or different) extent the Kiwi’s. Their success in taking over the market in the UK has been their downfall. Too much average, decent (but bland ) “critter” wine coming from young vineyards, made for the big corporate wine brands, lacking true personality and sense of place has been flooded onto the supermarket shelves. Now the inevitable has happened: the supermarkets are making sure they make money in the recessionary times and it’s the suppliers that have to bite the bullet. Offers of 3 for under 10 quid have surpassed BOGOF”s ( Buy one get one free); ie what was a 50% discount is now a 66% discount. On top of this, the Aussies have a currency that’s stronger than the Rand against the pound, they now have to pay for water to irrigate their parched vineyards and worst of all, South America has woken up and is starting to produce some great wine at a fraction of the cost that the Antipodeans are.
The Kiwi’s were making a huge name for themselves with Savvies (Sauvignon Blanc) so what happened? They got greedy, demarcated new outlying land as part of established areas to supply the over demand. Bam! Two big crops later with all the extra plantings and there’s a flood of half decent SB retailing under 5 quid a bottle, where the average a few years ago was closer to 10.
Chile is the big thing on everyone’s lips now. Nice wines at a really good price and they are set to grow tremendously in the lower price brackets, kicking a lot of Aussie and Kiwi wines off the shelves.
A big worry for the SA wine producer should be the emergence of the Independent wine trade’s “own import” brands as competition in the overstocked market. The wine retailers are often owners of their own label brands which they focus on selling as much -, if not more – of than the private wineries they represent or sell. The reason being, they cut out the middle man (importer), and make more margin. Common business sense this may be, but it makes it very difficult for the estates and producers that invest their time and money in trying to build a brand and then basically compete with what could be called “Fresh air wineries”.
So where does this leave good old RSA and its producers, in the picture you may ask?
Well, without a doubt there is an opportunity now to take over some of the higher price point positions that our Southern cousins have previously occupied . The secret: don’t get greedy on prices, aim to retail SA wines at around or just under 10 pounds, as the Aussie wines that were in that bracket are set to jump in price now by 10-20%. On the lower end, the big SA players need to spend money to create awareness and take out the competition that will be coming from South America in the year ahead. Everyone agrees in the UK, whilst soccer yobs might drink beer, there will still be millions of middle and upper class families happily sitting in front of the telly with a Sainsbury’s prepared TV dinner , watching Rooney scoring goals in Jozzi and realising that they should be celebrating with a bottle of the Cape’s best (that they can afford).

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