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05 September, 2008

Knowing the facts

I note with interest the headline in your

Aug 22 issue

regarding

Sainsbury's beefing up

its offering of wines under £4

- apparently following customer research and no doubt fuelled by the market share growth of the discounters.

However, while I am sure there is some

logic in this quest and that the buying teams have sharpened their pencils, I would

point out a few facts:

Duty on wine is now at £1.46 per bottle - a few pence more for

New

World

wines

V AT on a £4 bottle is 70p

Accepting that even our grocery chains pay these taxes, that leaves a sum of £1.84 for the rest .

I am sure that the "norm" 30% gross margin will be demanded, which will leave the grand total of 64p

- E0.79, AU$1.35 or $US1.17 - for the "quality" wine

I am certain they will be tasked

with seeking out of

the global wine supply base .

I also note that, while the £3-£4 off-trade price bracket

is important at 42% of the market, its growth is just 2%, while the £4-£5 sector is 23% of the market and growing at 7% . Needless to say, the £5+ sector is showing a healthy 20% increase and now represents 18% of the market.

I am

long out of the day-to-day battles fought with corporate number crunchers, PR executives and marketers, but

wonder where this will all lead. We know

the Treasury

is committed to a

2% over-inflation duty increase in 2009 and beyond, currencies are going to remain weak for the forseeable future and it has been raining in Europe

...

Is the sub-£4 strategy the right one? Will customers get better wines?

They may be cheaper but

will suppliers make enough to invest? Will we have a wine industry?

It's all a good debate and I look forward to tasting these offerings over the coming months

- it should be interesting .

I wonder how

the buyers would fare if charged with supplying a wine at 64p a bottle and making a profit for their companies

Allan Cheesman

(aka Mr Grumpy of Chiswick )

No sale with kids present

I understand

there is a need to control the sale of alcohol to under-age drinkers and the need to stop the supply by people of the legal age to those below the legal limit.

I was refused the sale of alcohol as my son did not carry ID. I am 48 years old and being treated like a common criminal makes me very angry. So on the subject of Challenge 25, why should I be treated in such a fashion as a law -abiding citizen?

And at what age can I take my children into a shop before I am not refused the sale of alcohol?

Tom Pearce, by email

Plea from a responsible trader

I'm fed up with having to take the blame when it comes to irresponsible drinking. When customers purchase alcoholic products from my shop, I imagine that, more often than not, they're being enjoyed in the comfort of their own homes and not, as many imply, on a park bench as a warm-up to their night out.

I'm a responsible retailer - I check the ID of anyone who looks under 25, I don't stock alcopops of any description and I don't run outlandish drinks promotions.

I like to think I attract

responsible drinkers with my choice of stock and rarely have to refuse service as few under-age customers attempt to purchase alcohol from me.

It's the bars and pubs running drinks promotions that are the problem. Customers are far more likely to line up shot after sickly shot on the bar of a cut-price, high-street boozer on their way to the local nightclub than purchase anything from me and attempt the same at home.

Perhaps the focus needs to be diverted elsewhere. And don't get me started on the supermarkets ...

Tony, by email




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