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Chris Orr comments on…………Festive Cheer
“standfirst”>Tis the season to be jolly. Or is it? For a decade and a half now, I’ve seen the wine trade eat itself up around this time of year in time-honoured tradition. Seasonality is the issue. “It’s not right,” cries the trade, especially when it comes to drinks like Sherry and Port. “All our sales are at Christmas time. We need to make it less seasonal – more year-round.”
I’ll admit, mea culpa, that I’ve indulged in this a bit myself in the past. In the callow youth of my writing career I too would complain about the seasonality of certain sectors of the drinks market. But stepping back from it and looking at it in the cold light of day, it’s all tosh and nonsense really. I mean, look at any other trade and you’ll find a degree of seasonality. The chocolate trade has two biggies a year, Christmas and Easter. The car trade has plate changes in August. The wedding industry goes nuts in September and May. Seasonality is not something you can change. Taking it to its most ridiculous level, do you think Santa Claus sits there come December time and moans to himself about the seasonality of Christmas? “Wouldn’t it be great if me and the elves could have Christmas all year round. Rudolph and his mates would be a bit knackered by the end of the year, but I’d be raking it in.”
But the discussion of seasonality is a red herring, hiding the real problem that no one really wants to tackle; that during the one period of the year when consumers are gagging for product, we literally give it away. Prices are slashed. Freebies are doled out liberally. And all because sectors of the industry are pathologically afraid that if they don’t engage in this bonanza of discount, they’ll lose valuable market share. Let’s look at that phrase “valuable market share”. If you’re giving it away, if your margins are non-existent, if you’re making no money out of your share of the market, exactly what bit of the word valuable actually applies to it? Perhaps they hope to realise profits on sales through the rest of the year. And yet these days, there is no seasonality about discounting, except that it gets even sillier nearer Christmas. So, again, where’s the “value” in that market? Why would you want to be in that market? If you’re producing 50,000 cases of your product, 30,000 of which are sold in a two-week period at virtually no profit or margin, why not just produce 20,000 cases and sell it all on margin? Now, if I actually asked that of a producer stuck in the above situation they would probably roll their eyes towards the skies and utter a morsel of condescension. But look at the Champagne sector. They have to give their wine away at vastly reduced prices at Christmas time – even the biggest of big brands. And yet, at the same time, they are pressing for an expansion of the delineated Champagne region in order to produce more Champagne – that they can then sell cheaply at Christmas. Why doesn’t someone stand up and say “No”. It’s like a mad, twisted version of the Emperor’s New Clothes – only no-one seems to want to point out the ridiculousness of it all. Of course, it’s not easy to do so, and there’s potential for a lot of short-term pain. But in the long term, I can’t really see another way forward. Only when some of the big brands and big companies make this move will we avoid the rather unfortunate “Christmas Greetin’s” (as in the Scottish interpretation of the word greet) that occur every year.