The Auswine Forum

Red Bigot commented recently on his site that that some of "the brave" wineries are starting to increase their prices already. I have read similar on other sites as well as hearing from suppliers on potential increases, and I am sure we've all seen it in the papers and on the TV recently.

I am interested to know what the general consumer feels about this. Is it Y2K hysteria or is it actually going to change peoples purchasing choices?

I am in the business and curious to see what the feeling is. I mean as Mr Howard says Australian Families have never been better off so is the wine price increases likely to affect things greatly?

If Australian wine did increase in price as much as is being reported I will simply buy more wine from.... NZ, South Africa, France, Spain, Italy, Chile, Argentina..etc. etc.

Or yes as you suggest drink more beer and spirits etc.

Media beat up. Driven by retailers and others who have a vested interest in charging higher prices.

We will look back at this in a few years and laugh.



Billy B

BB interesting feedback. Do you think that the wine prices of imported wines will stay the same if Aussie wines increase? Don't you think the wine importers / distributors will also want to cash in on the increases? Another dimenstion to to the questions I guess.

Just how much are these prices likely to rise?

Oh, and how long is a piece of string?

Brett

Look back and laugh!!!

Through the combined efforts of drought, frost and fire many suffered huge crop losses last year. The lucky ones might have got away with a 30% loss, the truly unfortunate total crop loss.

The way things are shaping this year the 08 crop will be no bigger.

Show me a business in any industry that can cop those supply losses and not have to adjust prices accordingly. There is nothing brave avbout it...if many wineries are to survive, prices will go up.

LL

roughred wrote:Look back and laugh!!!

Through the combined efforts of drought, frost and fire many suffered huge crop losses last year. The lucky ones might have got away with a 30% loss, the truly unfortunate total crop loss.

The way things are shaping this year the 08 crop will be no bigger.

Show me a business in any industry that can cop those supply losses and not have to adjust prices accordingly. There is nothing brave avbout it...if many wineries are to survive, prices will go up.

LL

I agree with you roughred, afterall a winery still needs to be profitable...

Prices at the low to middle part of the market may rise, but it will be a brave producer that raises the prices of their top end wines unless they are damn good.

There is still a ton of competition out there and as our trip showed, the quality is getting better, hence the competition even stronger.

There are a few top end wines we tried that have put a modest increase on their most recent release, and in many acses the quality has gone up enough to justify it, but if its hasn't its a "brave move Minister."

I'm talking about the "premium" end of the market, well at least $20 and up. There are some"magic" pricepoints for many people where a wine has to be seen to deliver a bit extra to justify the price. For me these are $30, $40 and $50, any wine nudging from below to over $30 or $40 price-points gets a careful look to see if I think it is still worth the asking price and a wine has to be pretty special to get me to buy over $50.

It is "brave" to be doing it right now when there are still so many good wines from the 2004/2005/2006 vintages out or yet to come, providing a lot of alternatives if they go too far (in the opinion of the consumer). That's happened for me many times in the past, when a wine increase in price past where I think it offers value I simply find another alternative, there seem to be plenty around.

On the other had it might be a good idea to nudge the prices up a little for these good high-volume vintages and not so much for the 2007/2008 vintages unless they managed to make very good wine in those tough vintages.

We will certainly look back and laugh (wryly) in a few years at how good we had it "back then" and wish we'd been able to buy more of the best wines from the glut years.

same volume, more quality, less price

with a massive increase in choice, that scenario is available for the clever among us.

having said that it never seems to work that way realistically!!

this year id be in the same volume same quality paying a bit more camp.

So should we be taking out personal loans to buy wine now?

Winelover wrote:So should we be taking out personal loans to buy wine now?

You mean you haven't already?

My prediction; (based on a little experience)

There seems to be a trend developing in this country, for whatever reason the media will speculate about price rises then sure enough 2-3 weeks later it will happen. It's happened with fuel, groceries, beer, real estate. It's almost like once it's published, or announced on tv, the responsible parties have a license to price hike. It's almost like the media are attempting to soften things up for the general public, either that or they have amazing crystal balls.

With wine, to some extent they're following this trend. The glut/drought/whatever catchphrase is in a the time. Anyone with half a wine brain will know that price hikes will predominantly effect the lower end of the market only. Hardys have started importing sauv blanc for their chateau cardboard, and some of their blends, and others will start following suit.

The kickarse $10 & sub $10 wines you can get now will probably dry up. In that $15+ category hardys, fosters, debortoli, yalumba, orlando etc. seem to be sneaking up prices, whereas some of the clever independants seem to be holding back on price hikes, and kicking up their quality to gain some market share. I think the best example of this is Ben Riggs.

Ryan,

The stories about wine price rises stem from reports issued by the official winemakers bodies. So its the industry using the press to soften up the market so that it becomes a self fulfilling prophesy.

The AUD has gone up 12% this month and is back to record highs. This is very bad for Australian wine exporters and should make imports from USD wine economies very competitive- South Africa & South America for example.

Pricing pressures aren't all upward from where I sit.

Voted same volume same quality. If one producer gets too expensive, then find another one that makes similar wines that I like at a (slightly) lower price. This could be from a winemaker in a different country if there are exchange rate / tax issues.

JamieBahrain wrote:The AUD has gone up 12% this month and is back to record highs. This is very bad for Australian wine exporters and should make imports from USD wine economies very competitive- South Africa & South America for example.

Pricing pressures aren't all upward from where I sit.

Yeah, wines from Cono Sur, Concha y Toro, and Errazuriz in Chile are pretty well priced here. Actually, I have ordered more Cono Sur wines for next month.

I think one thing to remember is how good prices have been. If you haven't been stocking up over the last few years, then you should have.
One big retailer currently offering the Seppelt Chalambar 2005 for $14.90 in a six-pack ! Hello...! Get on it now ! Does anyone think wines of this quality are going to get cheaper !?

cuttlefish wrote:I think one thing to remember is how good prices have been. If you haven't been stocking up over the last few years, then you should have.
One big retailer currently offering the Seppelt Chalambar 2005 for $14.90 in a six-pack ! Hello...! Get on it now ! Does anyone think wines of this quality are going to get cheaper !?

i agree, but that wine in particular is being destroyed by fosters.
it's now worth 25% less than it was 12-24 months ago, purely because they gave it to chains to burn. afaik no independants got any stock.

I may be a little cynical here (who me?) but I wonder just how much of any future price increases will be due purely to corporate greed as opposed to genuine climate/supply fluctuations.

We're already seeing RRP increases from the two big grocery retailers well before any food/wine shortage has hit - that's the typical policy with them, talk gloom and doom about supply shortages and then continue to screw over the producers for the same/less money and pocket the extra cash.

Then there's the process of the big wine corporates subsidising overseas sales with charging extra here - expect more of that if the dollar remains high/increases. That's also not taking into account the special deals they do with the two major grocers (above) while substantially increasing their wholesale charges to independent wine stores/small retailers like Gavin.

Like many here I'd predict my buying pattern in $$$/volume will remain pretty much the same - in the instances where prices are too much there will be plenty of alternatives that are at least as good if not better to switch to.

Cheers,
Ian

.... speaking of which, my local Woolies is having one of it's 20% off sales. I went and had a look round for the hell of it. Their RRP on St Hugo is $46.99!

It looks like Ned Kelly was a gentleman after all.

TORB wrote:.... speaking of which, my local Woolies is having one of it's 20% off sales. I went and had a look round for the hell of it. Their RRP on St Hugo is $46.99!

It looks like Ned Kelly was a gentleman after all.

I noticed recently that Wynns B/L 05 jumped at 1st Choice from $21 to $27-$29, not sure exactly - was happy enough to have picked up a couple at the cheaper price even though it's still available for a bit less through the major e-tailers. Didn't want to buy a whole case just to get those couple of bottles. Even Faith Shiraz has jumped from less than $14 to $18.

The grocery-based liquor retailers do work mostly on RRP.