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Sticking with wine prices pays off in downturn

Published:  01 June, 2009

On-trade operators who have held their wine prices or switched to cash margin have reported successful trading despite the recession.

On-trade operators who have held their wine prices or switched to cash margin have reported successful trading despite the recession.

That was one of the findings of a debate co-hosted by the Wine & Spirit Trade Association and Wine Intelligence.

It followed WI research that found that just 20% of wine drinkers perceive wine to be good value in the on-trade,compared to 71% in the off-trade.

"It doesn't necessarily mean wine is expensive," said business development director Brian Howard, "but those who are selling wine on our behalf in the on-trade aren't doing a good job in communicating to consumers about the value they are getting."

Texture co-owner Xavier Rousset said his business had moved away from a fixed GP to a per-bottle cash margin on higher-priced wines.

"Mouton Rothschild comes out at £165 whereas it used to be £250 or £275," he said. "After we made the change we had bottles if it - and Sassicaia or d'Yquem '96 - that had been on the shelves for a year and they started to sell.


"If people see value in the wine list they will trade up."
Rupert Clevely, chief executive officer of gastropub chain Geronimo Inns, agreed that cash margins - and subsequently more attractive prices - were a good incentive to get people to trade up to higher-priced wines.


"We sell Chateau Belair '03 at £52 which is a really good deal at the top end.
"We have a £15 per bottle cash margin at the top end of the list and it works really well. I'm amazed at the amount of wine we sell at that level."


WI figures are showing that between a quarter and a third of on-trade customers were spending less on wine in the three months to February, across a range of consumption occasions, with pubs suffering more than restaurants.

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