Back in 2006, Jean-Manuel Spriet, the then chief executive of Pernod Ricard UK, sent shockwaves through the wine trade by admitting that many of the “half price” wine deals in supermarkets were actually a rip-off.
The fact that a leading player in the wine business had admitted that consumers were being conned caused many a raised eyebrow.
In effect, Spiret was saying that many of the “half price” deals that you’ll find in your local supermarket/ discount retailer are not in fact deals at all. Put simply, a bottle reduced from £7.99 to £3.99 is often worth only £3.99 in the first place.
Retailers use a policy called “marking up, only to mark down” where they put a product on sale at a high price in a select number of regional outlets for a long enough time to ensure they can legally claim the product was being sold at that price before then offering it nationwide at a lower ” was/now” price. The customer will then beleive he is getting a quality wine for a bargain price. Confused? That’s the general idea.
The industry beleives that the “mass market” wine drinker is obsessed by the £3.99 price point and this affects the way that retailers are selling us wine and the way that some suppliers are now producing their wines.
In Spiret’s mind ’Consumers know they are getting misled … they get used to it. At the end of the day, it just leads to the impoverishment of the wine trade”.
Spiret’s insight provides us with a depressingly cynical view of the way wine is both sold by the big retailers and supplied by the big wine brands. More worryingly it gives us an insight into what the big retailers really view their customers to be, namely lazy and ignorant.
In many ways Spiret was simply highlighting the types of marketing practices that are in play in many industries and it would be unfair to single out the wine trade as unique in using such tactics.
Given that supermarkets represent two thirds of wine sales in the UK, these practices also have a direct effect on the public perception of the value of wine.
If the regular wine drinker believes that he is getting £7.99 of value from a £3.99 bottle then it follows that it will be much harder for the independent wine retailer to sell something whose real value is (and always was) £7.99.
There is, of course, no end in sight to this type of price fraud – the subjectivity of a wine’s value leaves this particular sector open to all sorts of underhand practices.
However, if the political mood continues to be against discount selling for alcohol, it will be interesting to see how the big retailers find a real price for wines they have knowingly mis-sold for the last 10 years.