Chris Brook-Carter

Super discount market

By: Chris Brook-Carter - 6 February 2004 12:04

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Predictions of a wine glut and the fallout of ferocious competition between retail majors are now having an impact on Australia’s retail wine market.

Bottled wine is this week being nationally advertised at A$3.95-$3.99,  (US$3.00 - $3.03) the brands being those of the respected major producers Angove and DeBortoli.

When government taxes of more than 40% are factored in, it becomes apparent that margins are exceptionally slim.

Behind the buyers' strength are three factors: the domestic retail trade is increasingly dominated by two supermarket giants, Woolworths and Coles Myer, who force economies of scale; the 2004 vintage now imminent is predicted to be 28% above that of 2003 with consequent serious pressure on storage space for new wine; and the export trade, although buoyant, is being dented by the unexpected strength of the Australian dollar, currently trading at US$0.76.

By our Australian correspondent Tony Baker

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