Coles takes on Aldi with cheap, award-winning wine

COLES is pulling out the big guns, taking on Aldi with a product aimed at penny-pinching hipsters and mum-and-dad shoppers.

Coles group wine buyer Ed Ashley holds up the award-winning $5 plonk. Picture: Sam Wundke

WINE snobs on a budget are the winners in the latest battle between Coles and Aldi.

The supermarket giant’s liquor arm is gearing up to take on the German discounter with private label plonk, after Aldi won over drinkers with a slew of awards.

A $5 bottle of red sold exclusively at Coles was yesterday named as the best wine under $20 from Australia and New Zealand at the Winestate Wine of the Year Awards.

The James Busby Big & Bold Shiraz 2015 was chosen from a field of 10,000 wines by a panel of expert judges that included Australian wine industry legend Wolf Blass.

It was the cheapest wine ever to win the award, and the first time a home brand took the honours.

“It was a shock and there was a fair bit of mirth when it was revealed the Coles wine won,’’ Winestate publisher and head of the judging panel Peter Simic told The Australian. “We have never seen anything like it.’’

Now Coles is looking at expanding its private label wine range to compete with Aldi, which has lured wine lovers with its surprisingly high-performing budget booze.

Since branching out into liquor in 2003, the German supermarket chain has grown its wine business at 10 times the industry rate.

Six of its low-cost wines received gongs at last year’s Sydney International Wine Competition, including a $5 private label rose that became a customer favourite.

Coles, which sells alcohol through its Liquorland, Vintage Cellars, First Choice and Liquor Market outlets, is playing catch-up. The retailer wants to grow its private label portfolio from the current 10 to 20 per cent of brands currently stocked, its head of wine sourcing Ed Ashley told Fairfax Media.

‘WE DIDN’T RESPECT ALDI’

It comes as rival Woolworths beefs up its private label range of everyday grocery items, with so-called “phantom products” that match Aldi’s approach of leaving the supermarket’s name off its home brands.

Woolworths chairman Gordon Cairns yesterday admitted the retailer had initially failed to take the discount chain seriously when it arrived in Australia 15 years ago.

“We were somewhat lackadaisical in responding to the threat from Aldi — that is no longer the case,” Mr Cairns said during the group’s annual general meeting.

But he said Woolies’ own-brand products now matched Aldi’s prices, and that it had regained its lead in fresh food after temporarily losing its mantle to Coles.

Alcohol was named as one of the retailer’s top five priorities for its turnaround, with its $484-million-a-year Endeavour Drinks Group — which includes Dan Murphy’s and BWS — one of the only segments to grow its earnings in the last financial year.

Chief executive Brad Banducci echoed Mr Cairns’ view of Aldi after shareholders expressed concern about Woolworths having not kept up with the competition.

“We didn’t treat Aldi with the respect they deserved as a very successful global retailer,” Mr Banducci said. “We have done a lot of work on our own brands.”

He said the group initially matched its entry-level Home Brand product prices with Aldi’s prices but “it didn’t move the dial” until Woolworths began phasing out Home Brand and redesigning and expanding its Essentials brand last year.

— With AAP

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