A better deal for wine consumers?

Press, 7 May 1981, Page 12

A better deal for wine consumers?

Maurice Hunter's

grapevine!

Changes announced recently in legislation affecting the wine industry indicate that the consumer is in for a better deal with reduced prices for premium wines, at the expense of those lower priced. This is the result of replacing the current sales tax system with a specific wine tax. But so far we have had no indication where the dividing line is to be drawn. In view of the Government’s attitude towards fortified wines — sherries and ports — in increasing the sales tax from 20 per cent to 40 per cent last July, my bet is that the fortifieds wilt be classified in the lower group, and the. new wine tax will also be based on alcohol content.

Table wine, with an average alcohol content of 10 per cent, commands 60 per cent of the market. The fortifieds, with an average alcohol content of 30 per cent, have the remaining 40 per cent, • So fortified wine drinkers can expect a sharp Increase in the price of their favourite tipple, while those who prefer mainly table wines will be able to indulge more economically. The creation of limited wholesale licences, holders of which will not be able to sell to the public will, I believe, also create something of a furore throughout the industry, depending on who gets the licences.

The wholesale grocery merchants, with dollars and cents signs in their beady

eyes, have been lobbying for as long as I can remember to get into the liquor business. They will see this as the ideal opportunity. The wholesale selling of wine is about to become a completely new ball game. One wine company executive shuddered at the thought and contended: “We’ll be screwed down so hard that it’s a frightening prospect.” He meant that they would be approached to supply orders large enough, for the purchaser to demand extra discounts, and which they could not afford to allow to go, down the road to their competitors by refusal. The purchaser, in turn,

would apply these discounts to his selling price to existing licencees, resulting in cheaper prices to the consumer. In essence, the fellow with the biggest cheque book will get the best deal. This may sound like good news for the consumer, and so it. will be if you are satisfied with a limited choice. In these days of computer stock control the computer sheets are carefully scrutinised and, if a line is not earning its keep, retribution is swift and ruthless — the wine is eliminated. The name of the game is turnover for profit, , and the lines chosen are fairly obviously the market leaders.

The smaller winemakers will find it more and more difficult to maintain a good spread of representation m a highly competitive market. The decision to allow wine shops to sell imported wines is a step in the right direction, but it is to be hoped that it is only a first step. Wine shop licences were created in 1948 to provide outlets for a struggling industry which could arouse no interest among imported wine oriented wholesalers.

There .is no doubt that a large measure of the credit for the expansion of New Zealand wine sales is due to wine shops. Now, however, that the industry is no longer struggling the licences have fulfilled their purpose. It Is right that the Government should recognise the fact that wine resellers are willing and able to provide a more extensive service.

But visitors to the country, and a great number of New Zealanders as well, find our licensing system confusing. They cannot understand why liquor other than the local wine cannot be bought at wine shops. Hardly a day goes by without a request for

beer, spirits, or imported wine. Many a disgruntled customer has been faced with the choice of burning petrol to make the required purchase, buying eight litres when he wants only one bottle, or going without. By far the greatest number of inquiries are for beer or spirits. Since most wine shops are located some distance from the nearest fully licensed outlet, there is a strong case for further extensions in the interest of service to the public. The move win t however, result in a small increase in the quantity of imported wines being available as I am given to understand that wine resellers will be able to import wine on their own account in addition to purchasing from established wholesalers. But do not, on your return from your holiday in Australia, expect to be able to buy Australian wines at the same price as you have been. Cheap imports are out, and all imported wine will be subject to a tariff quota. The system is rather complicated but basically it means that the cheaper wines will be subject to a much higher tariff than the more expensive ones and, quality for price, will not be worth bringing into the country. And a good thing too. We have only comparatively recently got rid of our own rubbishy wines and the last thing we want is to be saddled with someone else’s.