Thursday, 19 April 2007

Wine Prices an Absolute Joke!

'Anyone for a whine', South China Morning Post, 19th April 2007, p.C8

In today's South China Morning Post was an article titled 'Anyone for a whine' written by Annabel Jackson. Hong Kong has recently reduced duty on wine imports from 80% to 40%. Though this is still a hideous amount (espeicially as nearly everything else in Hong Kong is tax free including beer and sprites), it is at least a step in the right direction. The article
discusses the apparent lack of discount being passed on to consumers and mentions the difficulties faced by suppliers in passing on these savings. Many of these arguments have suggestions of validity, yet others sniffle as inadequate excuses. Sure tax is one issue, but what really annoys me is not the missing discount, but the lack of integrity and consistency shown by the big retailers with their wine pricing.

At my local supermarket the price of wine and sprites is a constant game of snacks and ladders; rising and falling and falling and rising. On a couple of occasions I have visited Yuen Long and Tin Shui Wai branches of a supermarket in the same day and couldn't believe it when they were selling identical wines at different prices. Recently I bought a bottle of Moskovskaya vodka that was being promoted at a reduced, 'super special' price of only $99, yet as soon as this 'promotion' finished the same vodka returned to it's normal price of $79! Examples of the lack of consistency in prices at our major supermarkets are numerous, but here are a few.

Same product different price: Let's look at popular Australian export Jacob's Creek. I have attached poor quality photographs (taken on my phone) of the wine being sold at three different prices by the same supermarket chain. You will notice that not once is the product identified as being on special, so it would seem that Jacob's Creek wines can either cost $75, $82 or $109 depending upon how the supermarket feels on the day; a price fluxuation of up to 31%!

'Discount' and 'normal' price: As there seems to be set retail prices for wine the idea of a product being on special seems something of a contradiciton - how can it be reduced when their is no standard price from which to dioscount it from. Often a wine will be garnished with flashy signs attracting buyers to it's 'reduced price', yet is this price really offering a discount? A example is the Penfolds range at my local supermarket. The Thomas Hynland wines were selling for $119, while Koonunga Hill was being promoted at $99 reduced from $149. Are these prices legitimate? Thomas Hynland is the label above Koonunga Hill in the Penfolds portfolio (see here); in Australia the Thomas Hynland sells for around $A20 while the Koonunga Hill is only about $15 (see here and here). Why does a supposedly better quality wine, have a lower price that than a lesser wine from the same producer? Comparing these prices seems to suggest that either the Thomas Hynland is an absolute bargain which the supermarket has forgotten to tell us about or that really there is no 33% discount on Koonunga Hill and it's usual price isn't $149, but is perhaps somewhere around $99.

I apologise for what has been a pretty long rant and I must add that Hong Kong has some fantastic small wine retailers who sell interesting and quality wines. In Yuen Long their are five decent independent wine stores that I visit regularly. Unfortunately though, many people in Hong Kong buy their wine from the supermarkets and the huge amount of the market share they posse means that they need to be more responsible and honest in their pricing policies. I've also got a few issues with the way they store and handle their wine, but that's a story for another day ...

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