What wine is really a ‘Smart Buy’ and which one should you not ‘Select’

WE HATE to break it to you, but there’s a good chance you’ve been fooled by Coles, Woolies or even both. This is their big, cunning con.

WOULD you buy a Woolworths Select Chardonnay? Would you be mad if you found out you already had?

Aussies have a serious taste for vino. We’re going off beer, and on current trends we will soon drink more alcohol in wine form than beer form.

But are we really getting the good stuff? The answer may surprise you.

A lot of the wine for sale in Dan Murphy’s is Woolworths’ own brand. Take the Bay Estates pinot noir ($15.99 a bottle). It sounds like it was made by a small family-run vineyard somewhere coastal. Or the Spanish tempranillo ‘Lovers not Toreadors’ ($16.99 a bottle). The label is so chic, so hipster, you’d feel trendy bringing it to a dinner party. These wines might sound like they’re the work of eager local vignerons, but no such luck.

So fancy, so chic, so Woolworths Select.

The brands are instead owned by a company called Pinnacle Drinks, which has a head office in Sydney suburb of Surry Hills and an exceedingly uninformative website.

It registered the brand at IP Australia, where it also registered 343 others, including brands for spirits, beers and ciders.

We already know Coles and Woolies have a stranglehold on our grocery shopping, and dominate the hardware sector with Bunnings and Masters. But not everybody knows how strongly they control our plonk. They sell more than half of all wine in Australia. And there are signs we’re getting screwed.

The price of grapes is falling.

So wine should be cheap, right?

But the price of wine keeps going up.

Something about these graphs doesn’t add up.

That could be just due to quality getting better, sure. But the grip the Big Two have on the sector is getting so tight independent winemakers are starting to feel suffocated.

I didn’t know there was a real person called Wolf Blass behind the wine label Wolf Blass but there is. And judging by what he told Fairfax media, he’s mad as hell.

“It will definitely get worse and it’s very, very frustrating. These private label brands aren’t building on Australia’s great wine traditions,” Mr Blass said.

He’s not alone. There is a chorus of anger rising from among the industry’s 2500 wineries and 6300 grape growers.

Bruno Altin has a 100 hectare winery in Griffith NSW. He was upset enough to contact a Senate inquiry to share his view.

“The control of Coles, Woolworths and increasingly Aldi of the liquor market have left very few options for winemakers as to where and for what price they can sell their wine in Australia.”

There actually is a man behind the Wolf Blass label. And his name is Wolf Blass. Picture: Calum Robertson

Even head of the Winemakers Federation has been complaining to the government.

“What we would like to see is that home brands are identified so consumers can make their choice,” he said.

To be fair, Woolworths has made some big steps. In 2014 it signed a deal with winemakers promising: “Fairness and transparency across all aspects of the commercial relationship.”

Some small winemakers work with Wesfarmers and Woolworths, doing limited runs of wine exclusively for the big brands. That works well for them. But just 15 per cent of winegrowers made a profit in 2014, according to reports.

Small winemakers point out that just because they are not in favour with big retailers doesn’t mean they have no economic value — rustic little wineries are often big tourist attractions.

It is natural to want to support these little guys who are struggling to get their best vintages out there.

But it may not be as easy as you hope. Control of them goes far beyond Dan Murphy’s. Most bottle shops you can think of are owned by either Wesfarmers or Woolworths:

Coles has:

• 1st choice

• Vintage Cellars

• Liquorland

Woolworths has:

• Dan Murphy’s

• BWS

• Cellar Masters

• Langtons

• Winemarket.com.au

Both also own hotels where they can sell even more of their own-brand products.

The fact we are drinking home brand wine is pretty awkward for those of us who are wine snobs. And these days more and more of us are wine snobs, as shown by thus graph of the decline of the cask.

Australia, you’re just getting too fancy.

We may be getting more sophisticated every year. But one thing never seems to change. Whenever we want something, Coles and Woolworths are there to sell it to us.

Jason Murphy is an economist. He publishes the blog Thomas The Think Engine. Follow him on Twitter @jasemurphy.