The price of retailer-exclusive wines and entry-level own-label lines are expected to come under pressure following poor harvests in Spain and Italy.
Spain’s grape harvest is expected to be 40% lower than last year as a result of drought. And wine production in Italy could fall 8% this year due to the dry weather and heat damage to grapes, warn Italian researchers Istituto di Servizi per il Mercato Agricolo e Alimentara.
To date, Italian and Spanish suppliers have not had to raise prices by the same extent as some New World producers. Over the past year, the retail price of a bottle of Spanish wine has risen 4% to £4.55, and Italian 3% to £4.37, while the price of wine from Chile rose 10% to £4.69 [Nielsen multiple grocers 52 w/e 21 July 2012].
However, the poor harvests were likely to put pressure on the pricing of retailer exclusives such as Dino, Ogio and Mondelli, which are primarily sourced from Italy, and other entry-level own-label lines from Spain.
Buyers were already looking beyond Spain and Italy to countries such as South Africa, according to Booths wine buyer Andy Green.
“A lot of the big mults have sent buying teams out to South Africa,” he said. “We’ve got a couple of partners over there so hopefully we’ve got next year sourced in terms of sauvignon blanc. You can still get really good quality.”
Despite frost problems in parts of France, whose volume share in the multiple grocers has slipped marginally over the past 12 months, the country is expected to come back stronger next year.
“France may have some answers,” said Paul Shelton, category insights manager at PLB. “You have a chunk of premium volume going through, but France produces so much wine that they can hit the £4.99 price points as well.”
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