Australia is the land of big wine companies
Four big companies dominate the wine industry owning around 80% of the brands you see on the shelves. You may not have heard of these but they are biggies:
– Treasury wine estates: was Southcorp, then part of Fosters, now a seperate entity, owner of Penfolds, Rosemount, Wynns Coonawarra estate among many others
– Premium Wine Brands: was Orlando wines now part of Pernod Ricard, owner of Jacobs Creek, Brancott Estate, Campe viejo among others
– Constellation Wines: was Hardy Wines,owner of Omni, Hardys, Tintara, Banrock station among others. Now called Accolade Wines since June 2011.
– Lion Nathan Wines: the NZ brewing company have collected some big names, owner of Petaluma, Mitchelton, Stonier, St Hallet among others.
You will be surpised how many of the labels in the store come under these 4 companies. As I said, it is the land of the big companies. It is estimated that 92% of the wine Australians drink is made by the 22 biggest companies (think Jacobs Creek, Penfolds, Lindemans etc),,,leaving around about 1600 other smaller wine producers scratching around the chicken pen of the remaining 8%. Economies of scale are winning here.
Another thing you will note when poking around your wine store is the mass of Cleanskins available, which I have gone into in more detail in “what is a cleanskin”.
The other part of the equation are the supermarket homebrand wines, regularly identified by an address in a major city or being part of “James Busby” or the like. These are commodity wines that can be hard to differentiate from real wineries just by the label and you are going to see a lot more of them. Are supermarket wines taking over Australia? is the subject of another post.
And where does this leave the big wine companies like Foster? What to do when THEY can’t even control their own supply chain?
Maybe we will see the big 4 companies strike back with a Dan Murphys-esque discount retail outlets of their own.
Why not? By pulling supply to Coles and Woolies and only selling their familiar brands directly, they would take away the supermarkets ability to develop their brand recognition alongside a Penfolds or Jacobs Creek which is happening at the moment. We’ll see. They could get a better grasp on flash discounting too instead of running around to stores buying back wines they think are retailing too cheap.
NOTE TO THE BIG 4: if you take on this idea I will expect compensation.
- WINEDUCATION - 