Trick or Treat? Wine Style!
Ever stop and think: “This deal is too good to be true?” or “What’s the catch?” Even more wine specific: “Why is this so significantly reduced in price?” or “What’s wrong with it?” These are very valid and real questions that come into play when trying to pick out a great bottle of wine. I get asked these questions all the time from customers ranging from the super aficionados to the weekend wine drinkers. Are these deals tricks? Are they treats? With Halloween at the end of the month, I thought it would be a fun time to help you discern tricks from treats, dispel some rumors and give some industry insight in the process.
First of all, it is important to understand that all wholesale pricing must be posted to the state by the respective distributors, agents, or wineries. Generally, once wine pricing is posted, that is the price that all retailers, restaurants, and wine shops may buy the wine at. Many times during the course of a year, wines are “posted off” or discounted for a several month stretch. This discount can revert back to the original posted price, or remain posted off permanently, but the price across the board is the same for everyone. Retailers, restaurants, and wine shops set their own mark-up, which differs depending on the establishment policy. When wines are “posted off,” that is when a decision needs to be made: either keep selling the wine to customers at the same price and make a little bit more of a margin, or reflect the discount in dropping the price to customers. Follow me so far?
One great example of this recently has been the 2007 Owen Roe Sharecropper Cabernet Sauvignon. A very popular (and very delicious!) Cab. Upon release, this wine retailed for $19.99. In an effort to sell some product, the winery and distributor dropped the wholesale price by $5. Now, while this wine is well worth it and sells great at $19.99, many retailers or wine shops would continue buying the wine for less, but keep reselling at the same price. At Leschi Market, across the board for all wines, we take pride in reflecting the discounted price to our customers, and have been retailing this particular wine at $13.99, and consequently selling a whole lot more! One customer recently told me, “I just bought this for $20 at xxxxxx! Why are you so much less?” As a wine steward, I love hearing that!
One area to be a bit more skeptical on, especially with larger corporate chain retailers, are loss-leaders. Some wines will be literally marked up pennies over cost, then heavily advertised to lure customers in the door. Once inside, yes these deals exist, but take a look at other wines, many times they are marked up even more than normal. Don’t let them fool you!
By now you may be wondering why wines would be posted off. Is there anything wrong with them? Is this truly a good deal? Well, put simply, wines are posted off all the time for a myriad of reasons! New vintage releases will see older vintages drop in price. Recently single-vineyard Sineann Pinot Noirs (YUM!) dropped from $53.99 to $27.99, simply because the new ones are ready to roll. Dusted Valley out of Walla Walla has slashed prices because they have significantly changed their labeling, and want to get the new label out in the marketplace. These wines are not “old” by any standard, will age just fine, and are true gems!
Price reductions are also a direct correlation to consumer trends. For example, Australian wines, once the hot-shot region, has seen significantly slower movement of late. Tremendous reductions can be found on outstanding wine in an effort to reintroduce Aussie greats. Perfect examples include 2005 Smidge “Adamo” Barossa Valley Shiraz. Originally $34.99 down to its current price of $19.99! Winner! 2006 Bird in Hand Adelaide Hills Semillon-Sauvignon Blanc, from $17.99 to $7.99. Highly rated premium wines can be found too, like the 94-point Parker wine, 2005 Smitch Barossa Shiraz, originally $100, now available for $59.99….Wow!
Distributor closeouts, backlog of inventory, and seasonal focuses all play a part as well. I always encourage customers to shop around to see who is reflecting reduced prices. Remember, it’s okay to be skeptical and don’t hesitate to ask questions. Most wine stewards and sommeliers will have tasted a particular wine before bringing it on board (and trust me, we can be just as skeptical!). Having this basic knowledge in your repertoire will hopefully help you avoid the tricks and find the treats! So ask away! and more importantly, ENJOY!
Want to buy some wine now? Find Ken at Leschi Mart in Seattle, www.leschimart.com
