Woolworths insists £5 fizz is worth it

21 September, 2007

Critics might insist it's impossible for Woolworths to make a profit on its £5 bottle of Champagne, but the stunt has secured the retailer extensive media coverage.

The announcement that Woolworths was to sell a "limited number" of bottles in out-of-town supermarkets where it has secured licences, sparked a frenzy of media attention reminiscent of Threshers' 40 per cent off-voucher last Christmas.

Articles sprung up in the The Times, Daily Telegraph, The Sun, Daily Mail and The Guardian - which dedicated the majority of page three to the story.

Media debate has centred around whether Woolworths could be making any money on the fizz, which was launched under the retailers value-for-money Worth-it! brand.

Malcolm Gluck in the Telegraph pointed out that the government takes £1.71 in excise duty from each bottle of sparkling wine and on top of that would then take 74p VAT. Once the price of the bottle itself, the shipping bill and other costs were taken into account, the drink would be more or less worthless, Gluck said.

But Woolworths has insisted that it will make a profit on every bottle. Managing director Tony Page said: "Champagne is a luxury product, but it can be produced cheaply and efficiently, so there is no reason why it can't be sold at value prices."

Across-the-board media coverage, including a mention by Chris Evans on Radio 2, resulted in the Champagne selling out within five days of going on sale.

Woolworths is now in talks about whether to restock the Champagne. It is also considering selling cut price caviar, jewellery and perfume under the Worth-it! brand, but has no plans to develop any more alcoholic drinks, according to a spokesman.

What a fiver gets you

At £5 the Champagne is less than half the price of the cheapest bottle currently available on the UK market - Pol Aimé sold by Tesco for £10.74 a bottle

Its back label points consumers towards the best of Woolworths' pick 'n' mix sweets - chocolate raisins, peach fizzies and strawberry milkshake candy

The non-vintage Champagne is made of 40 per cent Chardonnay, 30 per cent Pinot Noir and 30 per cent Pinot Meunier

It is produced by Epernay-based Henri Villois and supplied by Park Lane Champagne in East Grinstead.




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