Value wines on the rack
The supermarkets are
selling budget ranges as if their survival depended on it,
but at what cost to wine's long-term future, asks Tom Ca
A new force stalks the land - it is
very cheap wine. Although
all the multiples will repeat the same story - that they've always delivered "great value
at affordable prices" - there is no escaping the fact that products introduced recently by Tesco, Sainsbury's and Asda significantly lower the bar.
Tesco
has a new range of Tetra Pak wines from Spain priced at £2.89. "Not that cheap," I hear you say, but this is for
1 litre of wine, so the equivalent of around £2.17 per bottle. Asda's newest Smart price and Sainsbury's Basics wines come in around £2.20 per bottle.
Whether or not there is genuine consumer demand for £2.20 wines is a moot point. Everyone is talking up the recession, but does the arrival of these wines really answer a call from cash-strapped consumers, or is it merely a ploy to lure more punters into stores by cashing in on downturn fever?
Sainsbury's senior wine buyer Melissa Draycott says: "The wines are not loss-leaders, but as you would expect margins are very slim." Independent merchant Noel Young is sceptical. "Absolutely, they are loss-leaders. We all know the cost price of a bottle and these super-low prices don't stack up. Supermarkets can do it because they can claw their profit back on tins of Whiskas and over-priced vol-au-vents," he says.
Cheesy puffs aside, Young's argument is persuasive. Tax makes up 44.15% of a £4.99 bottle of wine, according to the Wine & Spirits Trade Association . This
means that the non-tax part of the wine is worth just £2.79. By my reckoning, only around 40p of a £2.20 bottle is not taxation. That doesn't mean it goes on wine - it has to cover everything and everyone involved from grape, to bottle, to checkout.
Leaving the logistics of putting £2.20 wines on the shelves to one side, the questions remain: what are these wines for, and who is buying them?
"Our Basics wines are bought by customers aged 45-plus, according to our Nectar
card data," says
Draycott. "Forty-six per cent of the customers who buy the red wine don't buy any other wines, and its loyalty rank is ninth out of all our wines. It is bought across all socio-demographic groups."
Emma Fox, commercial director for Asda, is certain the wines are a response to demand from their customers: "Despite the economic climate, wine at Asda continues to perform ahead of market. We have listened to customers and ensured our offer reflects what they are looking for."
My impression was that none
of the buyers from the big multiples were genuinely keen to defend the quality of their very cheapest wines.
Some immediately pointed to other sub-£3 wines as "great examples" in their range. And
here's the rub: a wine like Asda's Montepulciano d'Abruzzo at £2.98 is infinitely superior to any of their credit crunch bottlings, explained by having
around £1 of non-tax to play with rather than 40p.
Almost by definition a £2.20 wine in the UK will be of poor quality. With decent £3 wines still possible, do we really need or want a lower entry point that has been scraped together into something passable? Can this possibly be in the interests of the wine trade or the consumer?
Michael Cox, director of Wines of Chile UK, has no doubts: "Such is the competitive nature of the UK retailing scene that the average price of wine has nowhere near tracked inflation nor tax increases during the past 10 years.
"I am deeply depressed by the current trend to create more absurdly cheap value brands.
"With rising duty rates, currency issues and other inflationary pressures these prices are unprofitable and unsustainable.
"The danger is that in five years' time we could look back with dismay and rue these strategies - ones that could bring many wineries to their knees."
The Wine Gang puts budget ranges to the test
The Wine Gang is Tim Atkin MW, Tom Cannavan, Anthony Rose, Joanna Simon and Olly Smith.
Each month they assess around 200 wines from the UK high street at thewinegang.com, so we asked them to cast their taste buds over the budget ranges.
All of the
following wines are Spanish Vino de Mesa, or table wines, and have 11% abv. The Tesco wines are 1-litre in Tetra Pak, the others are 75cl bottles.
Tesco Spanish Red Wine £2.89
Soft strawberryish nose, with a touch of earth. On the palate dilute flavours of strawberry. Barely any tannin or acidity to ruffle the surface. 76/100
Sainsbury's Basics Spanish Red Wine £2.21
Very similar nose, perhaps a slightly more baked fruit quality. On the palate less fruit and unattractive lemon-sherbet astringency. 74/100
Asda Smart price La Comida Red £2.21
Slightly richer colour than the Tesco and Sainsbury's examples. More vinous nose and palate has a touch of spice, but little fruit. 75/100
Tesco Spanish White Wine £2.89
Simply fruity and very neutral, but that leaves it inoffensive and so a marked improvement on the other whites here. 76/100
Sainsbury's Basics Spanish White Wine £2.21
Aromas are mute, palate is sweet. A simple wine with little substance behind the sugar, but would make a batch of party punch. 75/100
Asda Smart price La Comida White £2.21
Another mute character, with a touch of apple, but on the palate just too much like water with a squirt of lemon juice. 75/100
Tesco Spanish Rosé Wine £2.89
Slightly musty nose,
with some fruit . The palate hints at sweetness, but this is thin, not crisp, and not very nice. 74/100
Sainsbury's Basics Spanish Rosé Wine £2.29
They've resisted
wrapping the grapes in too much sugar, but it's a tad musty. If not decrepit, certainly rather tired. 75/100
