Australian wine in discounting dilemma

09 February, 2011

The Australian wine market faces tough challenges ahead because of a growing reliance on discounting, according to Wine Intelligence.

Latest studies by the research consultancy - entitled Australia Portraits 2011 and Australia Wine Market Landscapes 2011 - reveal that Australians are “less involved and less experimental” in wine purchasing and are “increasingly using price as the determining factor”.

Retailers are demanding more price promotions, and further own-label and exclusive -  lower-priced  - brands, according to the publications.

Wine Intelligence reports that while the Australian market remains profitable for established producers and consumers are spending more per bottle than in markets such as Germany and the UK, there is a trend towards price deflation in the in off-trade.

Stephanie Duboudin, Wine Intelligence’s manager for Australia said: “Today the market is at a crossroads - do you focus on engaging consumers with the product itself, or do you focus on the deal?”

Paul Henry, Wine Intelligence associate director said: “As the retail challenge in Australia begins to look similarly daunting to other maturing markets - price and margin compression, dominant buyer advantage, popular brands as traffic-drivers - brand owners must employ new consumer engagement strategies or risk losing equity and share to own-label and/or buyers' own-brand.”

Further details about the reports can be found at www.wineintelligence.com





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