Duty calls

Chris Orr implores retailers to pass increasing costs onto the consumer

Do you know it doesn’t seem that long ago that I was sitting in Waitrose head office talking to the then head of beers, wines and spirits about the company’s market performance and sales. Actually that’s probably because it wasn’t that long ago. Four years ago at the most I reckon. The man in charge then was Derek Strange and the thing that stood out for me most was the company’s reaction to suppliers.

"We still have many of our contracts that are fundamentally operated on a hand-shake," explained Strange. "A handshake," I asked incredulously. "Oh yes. Some of these guys have been doing business with the partnership for years, so it’s as good as any contract."

I remarked at the time that it was genuinely nice to see a relatively big business operating in a human way and behaving like a gentleman. But it would appear from recent news that the days of gentlemanliness are finally over – when it comes to supermarkets at least. Waitrose has asked its wine suppliers to prepare to absorb any duty increases in the Chancellor’s forthcoming budget or face price hikes on the shelves.
How desperately annoying is that for a supplier?

Although perhaps I’m slightly wrong and the days of honour are not entirely over. At least Waitrose has had the decency to do it up front and well in advance and make their position totally clear. Most of their competitors seem to think that waiting for the Chancellor to confirm what everyone knows – in other words that duty will go up – is a better way of dealing with this. Although what that really amounts to is a kind of "like it or lump it" attitude.

So my question is simple. When are the supermarkets going to start doing something with the category? Oh I know there are numerous heads of wines, beers and spirits that claim they are looking for innovation in the category – but they’re looking for innovation on a shoestring, provided by weary, deflated and frankly disillusioned suppliers. They can’t actually be bothered to do any of it themselves. Of course, they will cite this wine fair, or that wine tasting, or this fabulous special offer and discount. But fundamentally, it’s balderdash. There’s nothing new or exciting about sticking a whole load of punters in a room full of free or cheap wine and watching them get bladdered. That’s what’s known in technical terms as a "foregone conclusion" and cannot be regarded officially as "innovative marketing".

But if they want to actually do something innovative, how about being honest with the consumer and explaining that prices have to go up and they can no longer have their £4.99 wine at £4.99, because that’s not what it costs anymore. Do you know I get the general feeling that I’ve written something like this before? And actually, it’s because I have. Last year, and the year before and I think the year before that. It’s just sad that I have to add Waitrose to the annual gripe this year…

db – Chris Orr – 23 March 2006