Who makes my wine?
Words by Tyson Stelzer on 28 Apr 2016
Walk the aisles of your local Dan Murphy’s or First Choice store and you won’t find a wine labelled “Dan Murphy’s Select” or “First Choice Home Brand”. But lurking on those shelves are more than 100 brands owned by the supermarket chains with no disclosure on the label. In an age in which we are more interested than ever in the origins of our products, how can we distinguish a small family estate from a supermarket brand? The growth in supermarket “Buyer’s Own Brand” wines in Australia has been substantial, estimated to have mushroomed from five percent a decade ago to between 16 and 25 percent of the market today. The wine industry is concerned that this growing category of major retailers could mislead consumers. In February 2016, a Senate Inquiry report into the Australian Wine Industry put forward a proposal from the Winemaker’s Federation of Australia (WFA) “that the Government amend labelling requirements so wine labels must declare whether wine is produced by an entity owned or controlled by a major retailer.” “What we would like to see is that home brands are identified so consumers can make their choice,” WFA Chief Executive Paul Evans told the Inquiry. The enquiry’s report is not binding, but the government is expected to respond within six months. It can choose to accept or reject the recommendations. Not so simple The question of whether it should be the government’s place to legislate on this issue has been widely debated, but even if it is, the dilemma of how it could be defined and regulated is perhaps more pertinent. Buyer’s Own Brand wines have a fully valid and important place in the market, and the major retail chains own perfectly legitimate wineries under which some of their labels are branded. Some retailers’ own brands are even made by small, private estates. Further, many high profile winemakers, including Giaconda, Clonakilla, Oakridge and St Hallett, make exclusive labels for particular retailers under the winemaker’s own brands. Such relationships are of value for all levels of the wine industry. And if retailers are required to declare brand ownership, what of companies like Treasury Wine Estates, Accolade Wines and Pernod Ricard, who together own many more brands and a much greater market share than the supermarket groups? And, for that matter, what of the hundreds of private little “virtual” wine brands who own no vineyards, buy fruit and have it contract made in someone else’s facility? The big issue behind this discussion is the market dominance of Woolworths (who owns BWS, Dan Murphy’s, Cellarmasters and Langton’s) and Wesfarmers (Liquorland, First Choice and Vintage Cellars) and the increasing presence of Metcash (Cellarbrations, IGA Liquor and Bottle-O), Costco, and ALDI stores in the wine market. It is estimated that Woolworths and Wesfarmers together share just under 60 percent of the domestic wine retail market, with some estimates putting this at 70 percent. There is a bigger picture at play here, of which wine is just one small category. Controversy surrounds the supermarket duopoly and its increasing dominance across many categories. Legislative change for wine would not only be fraught with complications surrounding definitions and implementation, but such a precedent would have enormous ramifications for groceries, fuel, hardware, office supplies, insurance, etc.