Michael Luscombe, boss of Woolworths has brought some news for the nation’s wine industry: count on supermarket private-label wines capturing a greater slice of the market as shoppers fall in line with overseas trends and warm to home-brand offerings.
The message will chill Australian winemakers, already suffering dwindling profits because of the wine glut, and now facing a fresh challenge from supermarkets hooked on the better margins that flow from private-label products.
The Woolworths chief, whose company pulled in group liquor sales of AUD3.1 billion (USD2.7 billion) for the first half of 2009-10, said winemakers should have known the grape glut would help spur growth in private-label wines, adding it was not wise to blame shopkeepers for the competitive squeeze.
(Source: The Sydney Morning Herald Online)