Who makes my wine?

Walk the aisles of your local Dan Murphy’s or First Choice store and you won’t find a wine labelled “Dan Murphy’s Select” or “First Choice Home Brand”. But lurking on those shelves are more than 100 brands owned by the supermarket chains with no disclosure on the label. In an age in which we are more interested than ever in the origins of our products, how can we distinguish a small family estate from a supermarket brand?

The growth in supermarket “Buyer’s Own Brand” wines in Australia has been substantial, estimated to have mushroomed from five percent a decade ago to between 16 and 25 percent of the market today. The wine industry is concerned that this growing category of major retailers could mislead consumers.

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In February 2016, a Senate Inquiry report into the Australian Wine Industry put forward a proposal from the Winemaker’s Federation of Australia (WFA) “that the Government amend labelling requirements so wine labels must declare whether wine is produced by an entity owned or controlled by a major retailer.”

“What we would like to see is that home brands are identified so consumers can make their choice,” WFA Chief Executive Paul Evans told the Inquiry. The enquiry’s report is not binding, but the government is expected to respond within six months. It can choose to accept or reject the recommendations.

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NOT SO SIMPLE

The question of whether it should be the government’s place to legislate on this issue has been widely debated, but even if it is, the dilemma of how it could be defined and regulated is perhaps more pertinent.

Buyer’s Own Brand wines have a fully valid and important place in the market, and the major retail chains own perfectly legitimate wineries under which some of their labels are branded. Some retailers’ own brands are even made by small, private estates. Further, many high profile winemakers, including Giaconda, Clonakilla, Oakridge and St Hallett, make exclusive labels for particular retailers under the winemaker’s own brands. Such relationships are of value for all levels of the wine industry.

And if retailers are required to declare brand ownership, what of companies like Treasury Wine Estates, Accolade Wines and Pernod Ricard, who together own many more brands and a much greater market share than the supermarket groups? And, for that matter, what of the hundreds of private little “virtual” wine brands who own no vineyards, buy fruit and have it contract made in someone else’s facility?

The big issue behind this discussion is the market dominance of Woolworths (who owns BWS, Dan Murphy’s, Cellarmasters and Langton’s) and Wesfarmers (Liquorland, First Choice and Vintage Cellars) and the increasing presence of Metcash (Cellarbrations, IGA Liquor and Bottle-O), Costco, and ALDI stores in the wine market. It is estimated that Woolworths and Wesfarmers together share just under 60 percent of the domestic wine retail market, with some estimates putting this at 70 percent.

There is a bigger picture at play here, of which wine is just one small category. Controversy surrounds the supermarket duopoly and its increasing dominance across many categories. Legislative change for wine would not only be fraught with complications surrounding definitions and implementation, but such a precedent would have enormous ramifications for groceries, fuel, hardware, office supplies, insurance, etc.

HOW TO FIND WHO MAKES YOUR WINE

Without a mandate for transparency in labelling, what hope do you have of knowing who made your wine? This was the question that perplexed Murrumbateman winemaker Sarah Collingwood, who responded by creating “Who makes my wine”, a website listing all the brands owned by Woolworths and Wesfarmers.

When Sarah ultimately discontinued her site, wine writer Huon Hooke offered to host it. Some 280 brands are listed at therealreview.com, more than 100 of which are currently listed in Woolworths and Wesfarmers stores.

The Senate Inquiry into supermarket own brands has perhaps raised more questions than it has answered, and there is much for the wine industry to consider regarding achieving greater transparency in wine labelling.

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THE DEBATE RAGES

“At the core of this debate is the accusation that Coles, Woolies and other retailers with ‘own brands’ have no investment in the wine industry, but are opportunists who buy ready-made wine and put their own label on it,” says Huon Hooke. “Of course, there are many so-called wine producers that do the same thing: they own no vineyards nor wineries, but act like negociants,”

Larry Lockshin, Professor of Wine Marketing and Head of the School of Marketing, University of South Australia, agrees.

“There is no doubt that Buyer’s Own Brands, however they are labelled, take shelf space from branded wineries. But Buyer’s Own Brands are also made from Australian grapes, by Australian winemakers, in Australian facilities. Small growers have sold their wines (and later their grapes) to larger entities for hundreds of years. These entities: negociants, shippers, wholesalers and retailers have always created wine brands. The difference is that none of these historically has had the market power that a few retail companies in Australia currently enjoy.”

The issue of transparency is very different in the UK, James Tilbrook of Tilbrook Estate explains, “In the UK, supermarkets proudly display their brand and what the wine is called, e.g. Sainsbury’s Champagne. If it is good enough for them, why do Aussie supermarkets want to hide behind fake brands?”

Winemaker John Cassegrain also feels strongly about being honest with wine-lovers.

“The expectation from consumers is that they are buying hand-crafted wine from a vineyard estate, but the labelling of ‘home brands’ by the supermarkets is, in effect, cheating. They are not hand-crafted wines, in actual fact, they are manufactured wines, so to me it reeks of misrepresentation.”

“I think wine consumers need to understand what they are buying and where these are made,” agrees Leigh Dryden of Decante This. “There are so many ‘own brands’ out there it has become increasingly hard to tell the authentic from the bogus. Retailers, makers and distributors have nothing to fear of the truth.”

Even more vehement about the issue is Mornington Peninsula winemaker, Garry Crittenden.

“Speaking as someone with first hand experience of the way the major supermarkets treat their relations with wine suppliers, I can honestly say it beggars belief that, in the face of continuing opprobrium, they still treat the industry and their customers with an indifference bordering on contempt. But maybe it’s not so surprising when it’s simply part of the embedded culture surrounding supplier relations,” says Garry.

“Is it asking too much of them that they disclose a particular house wine is just that and the brand is owned by them? I can only hope that in his 2nd term as head of ACCC Mr Sims can dismantle some of the disingenuousness we see from these people.”

However, Hunter Valley winemaker Andrew Leembruggen,  believes the producers need to act themselves.