Tag Archives: wine pricing

How to take advantage of phony wine pricing

phony wine pricesThese four suggestions can turn phony wine pricing into real savings

Wine pricing today is a jumble of fake discounts, inflated markups to make the fake discounts look good, and make-believe member and club prices. And let’s not forget all those bogus volume savings, where the multi-bottle price at one store is the one-bottle price at another store.

But there are ways to make phony wine pricing pay off. Yes, it’s a bit of work, and no, wine shopping isn’t supposed to be a bit of work. But the bit of work is the difference between getting the most value for your money, and paying too much for crummy bottles of wine.

Hence, these suggestions:

• Know the real retail price. The free version of wine-searcher.com does just that. If you start there, you’ll be able to tell immediately that the $18 grocery store wine marked down to $15 costs $13 elsewhere. And then you’ll know to buy it elsewhere.

• Plan your buying; don’t buy on a whim. If you need a bottle of wine for dinner, that’s one thing. But if you’re at Target or Walmart, don’t throw bottles into the basket just because. The next thing you know, you’ve paid $75 for five bottles of wine that might have cost $60 at another store.

• Know which stores offer which discounts – and which discounts matter. World Market’s four-bottle, club member discount is often a sham. But one Dallas specialty grocer offers 20 percent off six bottles every week, changing the discount from white to rose to red and so forth. That is almost always real savings. So don’t be afraid to ask how a store’s discount policy works.

• Use those discounts. I stock up at the Dallas specialty retailer depending on what’s on sale. That way, I can buy my $10 wines for $8, as well as splurge on $12 or $13 bottles (even if they cost $10 or $11 elsewhere). This approach will even work with grocery store pricing. In the spring, my Kroger was selling Wine Curmudgeon favorite Spy Valley sauvignon blanc for $16, which is more or less the real price. Thanks to the card discount, I was able to buy the wine for 10 percent off the real price. So I bought two.

Finally, remember that the independent retailer is your best friend. The independent retailer’s pricing is usually the most fair, and most will offer the standard 10 percent case discount. How can you go wrong with that?

More about phony wine pricing
Wine pricing foolishness, and how one group stopped it
Wine pricing skulduggery
Transparency and grocery store wine prices

Wine pricing foolishness, and how one group stopped it

Wine pricing

Prices, prices, what’s the real price?

It’s time to bring on the lawyers when wine pricing reality gets out of hand

We’ve written many times about the foolishness of post-modern wine pricing – the phony suggested retail prices, the discounts that aren’t exactly discounts, and all the rest. In fact, in the past couple of weeks, I saw a $10 bottle of California rose that carried a “real” price of $20 at my local Kroger, while the Central Market chain sold a Texas white for $16 in Austin and $11 in Dallas.

What can be done about this? If you’re an attorney who likes wine, you can sue.

The Wine Industry Insight website and Wines & Vines magazine have the details: A group of law firms claimed that Wines ‘Til Sold Out, a California cyber-retailer, used deceptive pricing to confuse consumers about what they were buying. To this, they have apparently reached a settlement worth $12.6 million in cash and consumer credits.

Wine Industry Insight reports that “the defendant denies all wrongdoing. As part of the settlement, the attorneys involved have agreed to make no public comment.” And, since I don’t want to be sued, I make no claim I know exactly what happened.

But the attorneys’ complaint seems to address the sort of practice that’s common at too many retailers. For example, wrote Wines & Vines, the lawsuit alleged that Wines ‘Til Sold Out “created wine brands with private-label companies and then offered those wines with discounts not based on any actual retail value and offered other wines with exaggerated retail prices to make the discounts appear even larger.”

One example cited in the lawsuit: A California cabernet sauvignon, which was supposed to cost $35 and was discounted to $13.99. But those prices apparently didn’t exist anywhere other than the Wines ‘Til Sold Out website.

I see that practice – or something similar to it – frequently when I shop for wine, though more often at grocery stores and the largest chain retailers. It’s incredibly frustrating; how are we supposed to know if we’re paying a fair price?

Fortunately, there are a couple of things those of use who aren’t attorneys can do. First, know that any discount that seems to be that big, like the $20 rose marked down to $10, is too good to be true, and that the real price is probably closer to the “sale” price. Second, check Wine-Searcher.com for the wine. If it’s not listed, it may well be a private label described in the lawsuit, where the pricing is meaningless. Third, Wine-Searcher’s average price for wine in its database is usually dependable. If you see the same wine, including vintage, marked down, then it should be a fair value.

Winebits 477: Wine retailers edition

wine retailersThis week’s wine news: Wine retailers Walmart, Total Wine, BevMo are in the headlines

Pricing dispute: BevMo, the West Coast liquor chain, has accused Total Wine of unfair advertising. It claimed that the latter’s ad campaign — “Don’t Paymo at BevMo” – that said BevMo’s prices were higher than Total’s wasn’t true. BevMo brought its complaint to the National Advertising Division, a self-regulatory group set up by the ad business. Total declined to participate in the process, which it is allowed to do. What’s interesting here is that Total, which seems to spend as much time courtrooms as Perry Mason, wasn’t worried by the challenge, which was made by one of the biggest regional chains in the country.

Pricing dispute II: Total has also run afoul of the Massachusetts liquor cops, who have accused it of violating the state’s minimum pricing laws. The chain has sued the Alcoholic Beverages Control Commission for briefly suspending the licenses of two Total stores for allegedly selling vodka, rum, and other booze for $1 to $6 below cost. In the Total suit, the company said it assumes that local retailers turned the chain in to the state because they didn’t want to compete on price.

Election dispute: How deep are Walmart’s pockets? The retailer spent more than $4.8 million that helped pass a ballot measure to allow wine sales in Oklahoma grocery stores. That was some 90 percent of the money raised by the group supporting grocery store wine sales. And, because this is about booze sales, the results of the election have ended up in federal court. The state’s retail liquor trade group claims the measure is unconstitutional and wants it voided.

Winebits 404: Restaurant wine, distributors, direct shipping

restaurant wine ? One person’s inexpensive: One more example of how restaurants are out of touch with their customers when it comes to restaurant wine prices. This new Dallas restaurant is boasting about its reasonably-priced list, because, said a restaurant official, “We have a low mark up on our wines, so we ?re priced fantastic.” That would be a wine list with most wines supposedly costing less than $100 (no website for the restaurant yet, so I couldn’t check). What would the official have said if there had been really expensive wines on the list? Is it any wonder, unless there’s a special reason to go, that the Wine Curmudgeon has all but abandoned Dallas’ restaurants? Besides, it’s more fun eating at home.

? Bigger and bigger: It’s not just wine companies that are getting bigger, but distributors as well. Wine Industry Insight reports that the 10 biggest distributors in the country control more than two-thirds of the wholesale business, which makes the group more or less as dominant as Big Wine. Why does that matter to consumers? Because, thanks to three-tier, every wine sold to a retailer or a restaurant in the U.S. has to pass through a distributor, which tacks on as much as 25 percent to the cost of the bottle for their effort. Fewer and bigger distributors means less competition, which means that percentage won’t get any smaller any time soon.

? Best practices: Want to know how to help your wine survive shipment, whether it comes directly from the winery or from an online or local retailer? This list, from Entrepreneur magazine, hits the highlights nicely, emphasizing how little wine likes heat, vibrations, and being left on a delivery truck all day. One overlooked point: Give the wine, particularly the pricier bottles, a chance to recover from the trip. The bottles need to rest after being bumped across the country, and letting them sit in a cool, dark room for a week or so isn’t a bad idea.

Winebits 390: Restaurant wine, retailing, consolidation

Restaurant wine ? Less and less: The share of wine that consumers buy in restaurants, compared to what they buy in stores, has fallen by some 10 percent since the start of the recession, according to figures compiled by Beverage Information Group. In 2014, restaurants accounted for 42.2 percent of all wine sales as measured in dollars, down from 47 percent in 2008. By itself, this isn’t doesn’t necessarily mean that restaurant wine is becoming increasingly irrelevant, given that the recession was so long and so powerful. But given the recovery in the retail side of the wine business, it’s another indication that consumers, fed up with the poor quality and high prices on so many restaurant wine lists, aren’t buying wine anymore. It also speaks to what might be a significant change in consumer dining habits, that they’re eating at home more often and buying wine when they do.

? Honesty is the best policy: Shocking news, but a British on-line retailer says too many of his competitors artificially inflate their prices so they can offer lower “angel” discounts on wines that consumers can’t buy anywhere else, leaving the consumer with overpriced, lower quality wine. It would be better, says the managing director of WineTrust, to price honestly, the way his company does it. This is a not a problem unique to Britain, as anyone who has ever tried to understand U.S. grocery store pricing knows, but it is interesting that a retailer is calling out other companies for the practice. I can’t imagine that ever happening in the U.S., where price confusion is a key part of retailing.

? Getting even bigger: This is how crazy consolidation in the wine business is becoming. A buyout specialist is apparently thinking about taking over Diageo, the British wine, beer, and spirits company, in a deal worth more than $70 billion. To put that number in perspective, 170 countries have a smaller gross domestic product. Diageo, though wine is the smallest part of its business, is still among the top dozen or so biggest U.S. producers, with brands that include Rosenblum, Sterling, and Dom Perignon. There’s substantial doubt whether a deal gets done, not least because it’s so expensive. But that anyone is even considering it points to the mania for consolidation in the world today.

Wine terms: Problematic pricing

Problematic pricingYou may see the wine term problematic pricing or pricing is problematic in a review, and especially in one of the mini-reviews that runs on the final Friday of each month. It’s mostly what it seems: If it’s problematic, the wine’s price is a problem, and the problem is that it that doesn’t offer enough value for its price.

Still, this hasn’t been clear to enough people, and so the need for this post. One PR woman in particular wasn’t quite sure what it meant. Either I liked her wine or I didn’t, and what did price have to do with it?

Price, of course, has everything to do with it. It’s not enough that a wine is cheap (or expensive, for that matter). Does it offer more value than it costs? Or is it just cheap, like most of the $5 wine the big retail chains sell? Or is it marketing driven, where you’re paying for what’s on the label as much as for what’s in the bottle?

I asked the great Lynne Kleinpeter about this, because I trust her palate, in many ways, even more than I trust my own. If nothing else, she can be objective when she tastes the kind of wine that makes me want to write horrible, misanthropic reviews. Her answer: “When I would buy this wine at this price? If it was the only wine in the store, and I didn’t have a choice.”

Wine pricing doesn’t get more problematic than that.

Winebits 319: Malbec, health, Champagne

Winebits 319: Malbec, health, Champagne

“Bring on the cheap malbec!”

? “Apr s moi, le d luge“: Which would be the price of malbec after the collapse of the Argentine peso in January. Malbec is the national grape of Argentina, and its economic crisis will not only force down the price of its malbec, but prices of malbec regardless of origin as well as most cheap red wine. Because that’s how the law of supply and demand works. Or, as Lew Perdue at Wine Industry Insight wrote: “Think Australian invasion before the U.S. screwed up the value of its currency and sent the Aussie dollar soaring.” This is another example of why it’s so difficult to predict when wine prices will rise — too many moving parts to take into account. How can a company charge more for ts California grocery store merlot when the competition is dumping something similar, like malbec, in the U.S. thanks to a currency flop?

? How much did all that wine really hurt? Englishman Chris Chataway, one of the world’s great distance runners in the 1950s and who helped Roger Bannister break the four-minute mile in 1954, died in January. His New York Times obituary reported that Chataway ran a 5:48 mile when he was 64, 41 years later, but wasn’t entirely satisfied with the effort. One possible explanation: Chataway told a friend he had smoked 400 pounds of tobacco and drank more than 7,000 liters of wine (almost 10,000 bottles) since the 1954 race. Which demonstrates that he was not only a world-class runner, but a pretty funny fellow who enjoyed his wine, and which is also why this is blog-worthy despite the ban of health-related wine news.

? The power of price: Asda, the British grocery store chain, wasn’t selling much of its private label Pierre Darcys Champagne over the holidays. So it cut the price from 24.25 to 10 (from about US$40 to US$17). No surprise what happened next, is there? A British trade magazine reports that the supermarket sold almost 8 million worth (about $US13.4 million) of Pierre Darcys in the 12 weeks ending Jan. 4. That made the brand the fifth-best selling Champagne in Britain over the holidays, beating top names like Piper-Heidsieck and Taittinger — despite being sold only at one retailer. This, of course, is the other component in wine pricing: How do we account for the power of consumers?