Southcorp Pricing Policies

Mike Hawkins · Post by **Mike Hawkins** » Sat Jun 25, 2005 4:50 am

I have posted details of several significant pricing discrepancies on Southcorp wines (US vs Aust). I thought the USD 7.20 for 2001 Wynns Black Label Cab was as good as its get but I may have found one equally as good.

In the past few weeks I have received emails over here in NY selling the 2001 Devils Lair Cab (blend), an absolute cracker of a wine for USD 16 per bottle. I have tried several now, they are not heat affected or in anyway less than pristine. This is seriously good booze and I concur with Halliday and WFM's lofty ratings.

What is Southcorp thinking ? Surely they could sell this with ease at AUD 40 pb at home. I know someone will bring up WET, GST etc, but once you factor freight to the US, distributors margins etc, this pricing policy is plain crazy. As a shareholder, I just don't get it.

Anyway, off the soapbox. I'll be drinking 2001 Devil's Lair for the next few years now !! I took all they had.

TORB · Post by **TORB** » Sat Jun 25, 2005 6:20 am

Mike,

SC was dumping stock during the takeover battle. In Oz, they were doing a deal with retailers on the Devilas Lair Cab, buy a case of the Cab and get a case of the Chardonay free. And the c-through is not cheap so it was a good deal for the retailer. It moved a lot a wine and the majority of the smart retailers didnt prostitute the price of the Cab in the process.

GraemeG · Post by **GraemeG** » Sat Jun 25, 2005 12:15 pm

TORB wrote:Mike,

SC was dumping stock during the takeover battle.

Were they ever. I got an e-mail from a Sydney retailer offering a bottle of 01 RWT for $40 with every case of wine bought. Fosters will tour through the warehouses and figure 'why did they need all this space, there's no wine here...'

cheers,
Graeme

Guest · Post by **Guest** » Sat Jun 25, 2005 11:35 pm

I am a bit worried about wine prices in generall now that Fosters took South Corp. Before retailers {Big Retailers like DM etc etc} had smaller wineries over a barrel if they wanted their wines to make it into these stores who have a high turnover {which most wineries need} they had to virtually let the retaler decide what price they would buy it at but now Fosters has alot more barganing power as the retailers need them as much now. Before the retailer would happily not sell 1 brand of wine if the deal wasnt right but would the retailer exist if Fosters took every wine they own to opposition now? Cannot see the retailers dropping margins at there own expense.

TORB · Post by **TORB** » Sun Jun 26, 2005 6:22 am

Anonymous wrote:but now Fosters has alot more barganing power as the retailers need them as much now. .

Yes, Fosters does have more power but I would not be concerned. When Penfolds, which is an icon brand, upset many small bottle shops with their pricing strategies some years ago, some of the small stores stopped stocking Penfolds. Did they suffer; no - they proved they could survive very well with out it. If WoolMyers pulled the plug on Fosters Plonk Inc, there are still the Jacobs Creek and Lehmanns, not to mention the Lion Nathan's of this world who can (veryhappily) take up more shelf space.

707 · Post by **707** » Mon Jun 27, 2005 9:31 am

Retailing is getting uglier. I don't see any light at the end of the tunnel particularly as you and I are the minority, the vast majority hapilly buy at the grocers stores.

Had a wander through Vintage Cellars to assess their 20% off sale, what a joke. Even with 20% off they are still well above the regular shelf price of my independent retailer for anything drinkable. Just shows what whopping margins they work on. Who buys from them??

Guest · Post by **Guest** » Mon Jun 27, 2005 11:19 am

If you are a tiny bit dearer you will get away with it provided you provide great convenience basically like 7-11's have. I dont see that this is the case with dearer wine retailers and like you wonder how they have any turnover. Infact what they make on 1 bottle is probably = to about 3.

GraemeG · Post by **GraemeG** » Tue Jun 28, 2005 8:25 pm

707 wrote:Had a wander through Vintage Cellars to assess their 20% off sale, what a joke. Even with 20% off they are still well above the regular shelf price of my independent retailer for anything drinkable. Just shows what whopping margins they work on. Who buys from them??

I frequent a local VC weekly on Thursdays, filling in time between work and tennis. I swear, the special "20% wine sale" price tags they have all over the shop are exactly the same prices they normally have. You know, normally the bottle is priced at $81/ea per dozen, but the new sticker says "$100 with 20% off". They must think we're all stupid...

cheers,
Graeme

Guest · Post by **Guest** » Tue Jun 28, 2005 9:12 pm

I have read this forum for 2 years. This first topic that really has motivated me to write. Lazy I know. There is nothing in the store thay can't be got else cheaper from another retailer. :evil:

Guest · Post by **Guest** » Wed Jun 29, 2005 1:34 am

Yeah but it tastes better from VC :lol: