UK needs to 'take off blinkers' when it comes to bulk wine, says top broker

By Gemma McKenna

Published: 10 December, 2014

Seventy percent of all wines are traded at least once in bulk, says leading broker Daniel Murphy, who believes the UK trade needs to wake up to the reality of trading in bulk.

Bulk wine Given two thirds of wine start off in bulk form, the UK trade needs to open its eyes to this way of doing business, argues Daniel Murphy

"Take off your blinkers and start to look around the corner," said bulk broker Murphy, who owns Murphy Wine Company, advising the trade to consider bulk wine rather than sticking with what they're comfortable.

Given the lack of profitability in the UK wine trade, and consumer demand for deals - while the average price hovers at just above £5 - it is getting harder for buyers to source wines and maintain margins.

"Behind the bottle, there's bulk. You need to know, in today's world, that it's a major component of what you're eventually getting," Murphy added.

What's more, Murphy said that buyers need not be intimidated - "you don't need to go through 20 companies to [source] it. You can do it yourself".

Trends show that younger consumers in particular are attracted to "wackier" styles of wine - those with added sugar or other flavourings. These trends can be easily manipulated when dealing in bulk - the US market is more open to the idea, and as a result, is making more money from wine than in the UK, Murphy argued.

Mintel's global drinks analyst Jonny Forsyth recently said that 36% of UK consumers interested in sweeter profile wines, but added that the UK wine trade, with the exception of Echo Falls, has failed to latch on to the opportunity. While in other categories, Kopparberg pear cider or Jack Daniels honey variant have caught consumer imaginations. He said: "All took the step towards what the Millennial consumer wanted rather than what they felt the Millennial consumer should be given," which appears to be how wine, particularly in the UK trade tackles the issue.

Meanwhile, Murphy said that the current oversupply in Chile, as the 2015 harvest looms, means bargains are to be had among surplus 2014 stock. "You're robbing the bank and getting away with anything in Chile - there are some unbelievable deals," he said.

Rabobank's Stephen Rannekleiv told Harpers.co.uk last month that although the Chileans weren't "really panicking yet... there is certainly a build-up of inventory". He said global issues, such as a return to form from Spain, meant it was taking back market share, while the large US harvest has reduced demand for Chilean wines there.

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