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Coles tells small wineries to ‘work with us’
'TRUST US, WORK with us and we will go out of our way for you.' That's the message Coles Liquor general manager Tony Leon has for Australian wine producers, both large and small.
Leon made the comment at the National Wine Centre last month at the launch of Coles' new grower relationship booklet, Backing Aussie wine.
Officially launched by Winemaker's Federation of Australia president Tony D'Aloisio, the booklet features stories of how 14 wineries are expanding and investing in their business on the back of a long-term relationship with Coles.
Leon said he hopes the booklet will encourage smaller wine producers to do the same.
'We want to let small producers understand that we are reasonable fellows and we want them to learn how to deal with us,' Leon said.
Wineries featured in the booklet are: Bay of Fires, Brown Brothers, Chapel Hill, De Bortoli, Devil's Lair, Fabric Wines, Grant Burge, Littore, McWilliam's Wines, Peter Lehmann, Project Wine, Rosabrook, Tyrrell's Wines and Zilzie Wines.
In presenting the booklet, D'Aloisio congratulated Coles for its support to the Australian wine industry.
'Of the off-premise market of Australian wine, 75-80 per cent is the two major groups, so on any stretch they are an important customer to our wine industry,' he said.
'Initiatives such as this that really promote Australian wine and push the supplier relationship are extremely important - and we support it.'
He said it was 'heartening' to see Coles focus on relationships, as distinct from short-term transactions. He also praised Coles' emphasis on supporting Australian wine and offering flexible business models - proprietary, exclusive and private labels - for wineries.
Rosabrook Wines owner Mike Calneggia travelled from Western Australia to attend the launch.
Calneggia has been supplying his Rosabrook Wines exclusively to Coles for the past four years. The winery is based in Margaret River and has about 170 hectares of vineyards that it owns, manages, leases or contracts.
Calneggia cited the ability to sell wine direct to market and payment security as major benefits of working with Coles.
'The key benefit is security of payment. The second benefit is that there is an opportunity for smaller producers to become direct suppliers to Coles,' he said.
'If we were selling Rosabrook via the traditional distribution model, we would not have the direct interaction with the Coles team and possibly our message wouldn't be as easily transmitted.'
But Wine Grape Growers Australia executive director Lawrie Stanford said that when growers sell directly to major retailers it undermines the grower-winemaker relationship.
'Increasingly growers are selling direct to major retailers. From our point of view, this should be seen as a wakeup call to winemakers,' Stanford said.
'Growers who are not getting equivalent prices from winemakers are choosing to convert their grapes to wine using contractors and they then sell that wine to the retailer. This means more buyer own brands which undermines private brand equity.'
Both Leon and Calneggia rejected claims that Coles was hurting small wineries and the industry.
'We're not trying to squeeze out suppliers but we do need to deliver good value wine to our customers. Customers today are not the same as they were 20 years ago. They want good value every day and it's our job to deliver it,' Leon said.
'It's not just the greater share of market power by two big players; it's a fundamental change of history. Grapegrowers and winemakers have to accept it as its happening in other industries around the country,' Calneggia said.
Reader question: What is your experience with the major retailers? Email your story to email@example.com
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