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Big retailers binge on cheap wine

Simon Evans reported in The Weekend Financial Review on 17–18 September 2005, that the excess wine sloshing around tanks and barrels at wineries across Australia is playing into the hands of supermarket giants Coles Myer and Woolworths.

The high inventory levels and excess grape supply forcing prices down for bulk wine is letting Woolworths and Coles buy up good quality finished wine at cheap prices to expand their push into own-labeled products.

A raft of rustic-sounding bottled-wine labels developed in-house by the two supermarket giants continues to appear on the shelves of their liquor stores.

Coles, via its Liquorland and Vintage Cellars outlets, sells in-house labels such as Diamond Ridge, Two Churches, Brookridge and Pleasant Valley, alongside more obvious house brands under the Vintage Cellars label.

Woolworths has a similar selection of house-brand wines, including Orchestra and Justin Jackman, which are both supplied by West Australian wine producer Evans & Tate under contract, and sold exclusively in Woolworths-owned liquor stores.

New Evans & Tate chairman John Hopkins says the WA group will continue to supply bulk wine under contract to third parties, as well as grow its own branded-wines portfolio, which includes Gnangara, Salisbury and Barramundi.

‘We intend to have a close relationship with both the supermarket chains,’ he said.

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