Majestic's news: two big developments

Today UK merchant Majestic announced that they are changing their mininum purchase policy, from 12 bottles to six bottles.

Since their beginnings in 1981, their business model has been to sell by the case. While this restricted their potential customer base, it meant that they could open premises in places where a normal retail wine shop selling by the bottle wouldn't be possible for licensing reasons. The one exception has been the Majestic shop attached to Vinopolis, near London Bridge station, where single bottle purchases are possible.

It turned out that people quite like to visit Majestic stores where they can park, fill up a box with 12 or more bottles, and then load them into their car. They now have 150 stores and are effectively a category buster: they have no competition for what they do.

It's unlikely that they'll lose money from this shift in policy. After all, they have trialled the 6 bottle minimum in a number of stores over the last few months, so they have a good idea of what will happen to sales.

But while many people have commented on the new 6 bottle minimum, perhaps more significant is their new venture, Wine Uncorked. This is a free in-store introduction to wine course, which will be led by Majestic store managers. I think it's a brilliant initiative, both for the consumers who take advantage of this opportunity, and also the managers who will presumably find running these courses a rewarding experience.

Wine trade commentators, who tend to be a bunch of doom-mongers, are using this Majestic news to predict the end of independents/Oddbins/Wine Rack, but I think they are being overly pessimisstic.

Majestic's initiative might encourage people who aren't really into wine to become hobbyists - the sort of involved wine consumers who then in turn begin shopping at high-end independent wine merchants. While Majestic have recently branched out into fine wine selling, involved consumers are a promiscuous bunch who will buy wine in all sorts of different places, and are unlikely to restrict their purchasing to just one retail outlet.

Busy tasting, Tesco and Asda, and some comments on the market

It's peak tasting time at the moment in the UK wine calendar, and I've been busy at it. Yesterday spent a few hours tasting at Tesco's Autumn tasting. The Tesco tastings are held at County Hall, next to the London eye, and to get to the riverfront room used for these events you have to pass through labyrinthine wood-panelled, marble-rich corridoors.

The wines were pretty good. I'm always pleased when a retailer like this does good work, because most people buy their wines from supermarkets, and it's good that people are being given tasty wine to drink. Someone had a copy of Malcolm Gluck's new book, 'The Great Wine Swindle', so I had a quick flick through. It seems that Gluck is now putting the boot into the industry that has given him a very nice career, and he's accusing other people of conflicts of interest even though he got into trouble with his editor at the Guardian over the same issue. Odd behaviour. I want to encourage more people to drink wine, because it's good, it's wholesome, and it is pretty naturally made.

I was chatting to Tesco's Nick Juby, who revealed that since the beginning of the year 250 000 households in the UK have stopped buying wine. 'It's tough', he said. 'There's clear evidence that the customers are trading down. The retailers that are doing well are the discounters, and Morrisons and Asda'.

Today began with the 'Great Cape Wine Debate' (more on this later - very interesting event), and then Asda's press tasting. The offering from Asda was better than I was expecting, which sounds like I'm damning it with faint praise. But Asda have been buying well, and a number of their wines in the £3-£5 range were really good. It's great for the consumer that they can buy good, affordable wine.

There was quite a bit of discussion about selling wine below cost - something that Asda have been accused of with their 3 for £10 offers. Philippa Carr MW, who heads the Asda wine team, would (of course) not comment on whether they actually do this (commercially sensitive information). But she did point out that brand owners can't set prices (price fixing is illegal) and it is up to Asda what price they sell their wine for.

I haven't asked Pernod Ricard's wine people this (they are the large drinks company that own a number of brands, including Jacob's Creek), but I don't imagine they were too impressed to see Jacob's Creek involved in the 3 for £10 offer (my advice to punters is buy, buy, buy at this price - it's one of the best of the big brands and a serious bargain at £3.33 a bottle). Moves like this have the capacity to devalue brands in the eyes of consumers.

Normally, promotions are funded by the producer. But some supermarkets actually foot the bill when they want to use wine as a loss leader to get customers into the store. Brand-loyal consumers are very price-sensitive with wine. If they feel they are getting a great bargain on their wine, then they might not notice when the supermarkets make their profit on other items which consumers are not as price-sensitive about. And you can bet that the supermarkets know exactly which items are price-sensitive and which are not.

I think it's a shame when wine is sold below cost. It hurts the producers - both those whose brand is damaged, and also those who are not promoted and thus considered as too expensive by consumers. I'd love it if supermarkets could think of selling interesting wines from smaller producers (perhaps by having a selection of 'niche' wines that differs from store to store - they often aren't any more expensive than branded wines), but this will never happen in such an artificially devalued wine market.

Bordeaux campaign, vintage 1934

At Fortnum & Mason today to taste a few sherries with wine buyer Tim French. Tim produced an old Fortnum's wine list from 1938, which made fantastic reading.

'It's amazing how tight the range was in those days', he remarked. There's a big section on Champagne, a page of Port from the wood, a page of Vintage Port, lots of Madeira, more than a page of sherry, then large sections on Bordeaux, Burgundy, Hock and Mosel.

The rest of France has a small section, and then there's a fascinating - if brief - list of 'Empire wines' (see below). It was fascinating also to see the Bordeaux section, including the 1934 campaign that includes both merchant-bottled and Chateau-bottled releases. How the wine world has changed.

Another Tesco Press Tasting

Usually, most supermarkets will have a couple of press tastings a year. Tesco have had three in 2007, altogether showing almost 500 different wines. That's a lot. It's largely because they've been making a real effort with their range, and it shows: there are some interesting wines here, and the quality is consistently good. It's hard to be objective about which of the big retailers has the best range, but in broad-brush terms it seems that Tesco and Asda are on the up, while Sainsbury is treading water a bit. M&S seems to be doing quite well, but I don't know Morrisons/Safeway/Coop well enough to say too much about their performance.

Today's Tesco tasting was held, once again, at County Hall, overlooking the Thames. It's a really good venue, although I almost wandered into the Star Wars exhibition on the way out after getting lost in a maze of oak-panelled corridors.

Interesting wines included: my first look at the 2000 Musar, which is a pretty good vintage for this wine; the 2001 Noval LBV, which is really good, once again; a lovely PX from Gonzalez Byass that's only £4.99/half; Tyrell's Vat 1 Semillon 2000, which is a great Hunter white that's worth its £20 asking price; and a beefy but elegant Yering Station Reserve Shiraz Viognier 2005.

Stormhoek's Threshers discount goes big

The BBC News site has picked up on the Threshers (UK off licence chain) 40% off deal - a piece of viral marketing originated by Web 2.0 dudes Stormhoek. The downloadable pdf coupon seems to have spread like crazy.

The beauty of this bit of marketing is that everyone benefits, and it isn't as mad an offer on Threshers part as it seems: they have a 3 bottles for 2 across almost their entire range, which works out as a 33% discount. Punters with the piece of paper effectively get another 7% off. So they won't be losing money on the deal. [The wines are priced such that they are good but not exceptional value at the 3 for 2 price.] Everyone seems to be selling wine cheap these days. The UK's two largest supermarkets are currently offering 25% discounts on multiple purchases.