A few days ago I posted on the £4 Southbank Estate Marlborough Sauvignon, and how this sort of price cutting was potentially damaging for brand New Zealand, even if it is a great deal for consumers.
I spoke to Elizabeth Ferguson at Southbank Estate’s UK agent Mentzendorff to find out the background to this story. Asda warned Mentzendorff that they were delisting the wine just before Christmas, and so Mentzendorff expected that Asda would then be selling through the rest of the stock.
But they didn’t expect it to be sold at £4. ‘They must be making a loss on this,’ says Ferguson, confirming that this is more than Asda were paying for the wine, which normally retails at £7.99. ‘They are funding it themselves,’ she said, referring to the offer price. ‘We deliberately don’t do stuff like that.’
It’s upsetting for a brand owner when their wines are sold below cost, because of the effect this has on the brand, and also the potential it has to upset other retailers who are stocking the same wine.