Wine industry fears poisoned chalice

Hills hotel, bottle shop and winery owners are sounding a warning bell over the State Government’s push to allow wine sales in supermarkets.

Clearly they have a vested interest in opposing the proposal, as does the Independent Liquor Retailers Coalition which is actively campaigning against the idea.

In the Government’s view, the new licence would benefit independent supermarkets, such as IGAs and Foodlands, which could work with SA producers to provide a new outlet for their boutique wines.

But the legislation cannot limit the licence to independent supermarkets, nor can it specify that only SA wine could be sold in stores.

Hence the fear that major chains such as Coles and Woolworths would use the change to further bolster their hold on the takeaway alcohol sales sector.

The coalition estimates the big two already command a 60% stake in that sector through their liquor stores and that the figure would rise to 80% if the new licence gets the go-ahead.

That would understandably make small wine producers jittery.

For those boutique labels which produce small quantities and have limited marketing budgets, getting their bottles onto a shelf in some of the larger bottle shop chains is already impossible.

They see securing shelf space in major supermarkets as also out of the question.

Many instead rely on relationships with local pubs and independent or small chain bottle shop outlets to sell their wine.

These stores take on their labels because of local demand for local wines.

If competition from supermarket wine sales forces the closure of these smaller stores, with them will go many small producers who will have lost their key outlets.

Arguably there may be some benefits for the local wine sector to gain by using the new licence to strike deals with smaller supermarkets.

But there are also many pitfalls that could result in this proposal irreversibly harming the industry it aims to help.

The Government must carefully consider this as it prepares to decide whether or not to proceed with the change.

The Adelaide Hills is only now coming into its own with a growing reputation as a producer of high-quality cool climate wines.

It would be devastating if this transformation was destroyed by a piece of legislation that simply makes it possible for us to buy a cheap bottle of red along with our cut-price milk and bread.