Out-of-control discounting has turned cider into a “cheap way to get drunk” and threatens to commoditise the wine category, according to a senior figure in Britain’s biggest wine company.
John Mills, senior vice president in off-trade sales at Constellation Europe, said price wars were stealing much needed investment away from both sectors.
Speaking at the Federation of Wholesale Distributors’ Drinks Summit last week, Mills said the cider category - divided between Scottish & Newcastle, with Strongbow and Scrumpy Jack, and Constellation which has Blackthorn and Diamond White - was in danger of being targeted by the government’s crackdown on binge drinking.
“It is time to start putting value back into cider and stop
giving the stuff away,” he said. “Cider has been commoditised by deeper and deeper discounting and increasingly ludicrous promotions in the on and off-trades.”
Mills said wines sales were starting to slow in the UK, and predicted 3% growth rates for the next few years. “We need to reduce these discounts in order to get investment,” he continued. “The wine category is also in danger of becoming commoditised, and could end up like the cider market.
“We have to find ways of driving growth into the category or it will end up being dominated by price.”
He pointed to wine education, better consumer research, npd and putting the FWD take-home blueprint as category drivers in the independent sector. Wholesalers needed to play a role by improving wine displays in cash and carry stores, he added.
The summit heard from ACNielsen that 75% of off-trade liquor was expected to be sold through grocers by 2006, but white wine and premium lager were the biggest opportunities for growth for the independents.
Claire Hu