Stepping into our resident columnist’s page is Marcin Miller who needs no introduction. [Okay, he’s most noted as the founding publisher and Editor of Whisky Magazine, prior to which he was involved in wine publishing. He has now established ‘Quercus Communications’—a drinks gospel company.]
What gargantuan and venerable shoes I have been asked to fill! I recall Richard Joynson’s pleasure at first having Turnbull sign as lead columnist for SWR. Clearly the man Hutton is a legend and you don’t need me to tell you why. I am truly humbled…
Today’s question is: Why are the British a nation of bargain-hunting cheapskates? Don’t tell me that it’s prudence, or a question of not being able to afford it, or a lack of consumer confidence, or canniness, or a hangover from the days of rationing. None of those things wash. It is a genetic lack of understanding of the difference between price and value for money. Which other country would find room for a programme called Bargain Hunt in the TV schedules? Or for wine critics who direct you to the cheapest barely drinkable bottles on the shelves?
Foreigners are happy to spend a lot of money on the finer things in life, why aren’t we? Nowhere is this more apparent than in drinks. Maybe it’s because we know we are being ripped off compared to the whole world when it comes to white goods, property, public transport and petrol (to name but a few). It may be that, in order to make ends meet, we have to cut corners on the booze front. But, hold on, we are ripped off on the booze front too because of the wretched duty levels we are forced to pay.
The average price of a bottle of wine in the UK is £3.94. When you take away duty and tax (£1.90) and the supermarket’s huge margin (£1.36), there is not a lot left over for the wine itself. And that’s an average. So if you are celebrating with a £25 bottle of champagne, someone somewhere is buying a case of something filthy at less than £3 a bottle…
At one level, a £3 bottle of wine will fulfil the same function as a £300 bottle of wine. Its consumption will inebriate the consumer. But, if that dictates your purchasing decision, stick to hair lacquer. For the discerning consumer it’s not about where you are going but how you get there.
What has particularly piqued my ire is finding a bottle of Scotch whisky for sale at £6.86. Great, you may think, Bargain. How can this be a bargain? The cost of duty and value added tax on a bottle of whisky is £6.49. That leaves 37p to cover production, bottling, marketing, distribution and so on. I think we can safely leave profit out of the equation. So what’s the cost of the actual whisky in that bottle? I’d estimate about 10p.
Mmm, delicious.
This is probably close to undrinkable— as a budding cheapskate myself, my research budget didn’t stretch to buying a sample—but it’s also unsustainable. Who is going to make money from this deal? Not the whisky producer, that’s for sure. It’s like those wine offers in every supermarket “buy one get one free”. Promotions account for nearly 50% of UK supermarket wine sales. The winemaker isn’t going to make any money out of them. He won’t be able to re-invest or to take any measures that will increase quality. But the fat cats get fatter…
Supermarket promotions don’t make sense for whisky companies; they have to sacrifice their margin to fund the promotions so they sell more but don’t make more profit, they don’t engender brand loyalty (shoppers will return to buy whatever is on offer not what was on offer when they last bought) and it devalues the category in the eyes of the consumer. Yet such is the power of the supermarkets that whisky producers are forced to promote sales in this way.
The big wine companies are getting bigger with the direct result that supermarket wines have become homogenised. Huge stainless steel vats disgorge wines that will have a plethora of different brand names and labels but the contents will be undistinguished and indistinguishable.
Something frightful has happened; wine is dumbing down faster than commercial television. There is only one thing for it; trade up before whisky goes the same way.
Whisky’s continuing commercial clout is due to its long-held international cachet. If the Americans weren’t so status obsessed, if the Japanese hadn’t been falling over themselves to buy ceramic flask after ceramic flask, then the face of the whisky world would have looked very different. Whisky is still in a position to take advantage of the world’s nouveaux riches (or ‘emerging markets’ as I believe they are known).
Ever noticed how seldom the big whisky collectors are British? They are Swedes, Italians and Japanese. If the Scotch whisky industry had relied solely on the domestic market we would have been stuffed generations ago. Keep them Taiwanese coming, then bring on the Chinese and Russians. Marvellous.
Mind you, as an aside, I was trawling ebay the other day and noticed that some mug, sorry collector, paid £227 for a 1972 Ledaig. Nothing wrong with that, you might think. Except that this was for a MINIATURE.
Anyway, I’m not advocating the opposite extreme to parsimony that is overt consumption and showing off. I hate that kind of vulgarity too but I appreciate that quality costs and, to be frank, I’d rather go without than make do with low quality. Does that make me a snob? Maybe; it depends on your definition of the word.
Ultimately, as a whisky consumer you hold all the cards. You have two options; buy cheap whisky from which no-one makes a profit or indulge yourself by spending more on it. The benefits of this are manifold. You will be drinking better quality whisky and the producer will make a little profit allowing him to reinvest in his business.
Of course, you know this; you buy your whisky from a specialist. You are the discerning exception that proves the bargain-hunting rule. I apologise if I tarred you with the same brush…
Ultimately there’s nothing for it but to encourage everyone you know to trade up. And if you are desperate for a bargain, spend £15 and buy a bottle of Loch Fyne Blend. You know it makes sense.
