The Netherlands has seen the price of an average bottle of wine in a supermarket rise from €2.71 in 2007 to more than €3.00 by March 2008, despite the Dutch market’s reputation for being competitive and low priced.
The Netherlands has seen the price of an average bottle of wine in a supermarket rise from €2.71 in 2007 to more than €3.00 by March 2008, despite the Dutch market’s reputation for being competitive and low priced. Marten Suurmeijer, senior consultant at Nielsen, which watches the purchase of the Dutch in the supermarkets, even speaks of a ‘turn’. According to Suurmeijer, two things have happened. First, the average price of wine in the supermarkets has gone up significantly and second, that consumers are actually buying wine at significantly higher prices than they did two years ago. “The volume share of sales in the below €2 category and €2-€3 category have decreased, while €3-€4 and €4-€5 in volume are considerably up,” says Suurmeijer. He explains that the average price of wine in the multiple grocers, including promotions, has increased to €2.82 over the period 1 January 2008 to 8 August 2008. This was €2.68 over the same period in 2007 and €2.61 over the same period in 2006. Suurmeijer says that by the middle of 2008, prices were already double that of the total increase in 2007 and “we expect that the average price at the end of the year will be even higher.”
Frederik Wilbrenninck, group buyer at Baarsma, confirmed the findings of Nielsen. “Consumers remained loyal to the winesthey used to buy. One of our wines was selling at €1.99 at SuperUnie last year, and now retails at €2.29, but the volume has not been affected,” he says. “All supermarkets in Holland have Alsace Pinot Blanc. In C-1000 I saw the same Pinot Blanc that was priced €3.69 last year now on the shelves for €4.19. That’s more than a 10% increase! And consumers are still buying it.”
Nielsen found an average price increase of 9% when it studied the pricing of 60 wines in the Dutch market in broad distribution, this year compared to last year. “This proves that the consumers are actually buying wines now at significantly higher prices than a year ago,” says Suurmeijer. In hindsight, the duty increase can be seen as a blessing. However, this may not be valid for the on trade.
According to Rudolf Bijleveld, managing director of on trade specialist OudReuchlinBoelen – market leaders with 20% share of the 60m bottle Dutch on trade - the duty increase and other cost increases have been passed on to the horeca. “However, as the Dutch horeca suffered from a ban on smoking from 1 July, the poor weather of the 2008 ‘summer’, reduced consumer confidence in the economy, CBS reported a decrease in sales in the on trade for the fourth consecutive quarter,” says Bijleveld. “And the price increases didn’t help.”
Although some analysts think the pricing situation has stabilised now, both Frederik Wilbrenninck at Baarsma and Joris Snelten at DGS fear more price increases for glass bottles later this year. “If you would see my desk right now you would see only PET bottles, both mono and multi-layered,” says Snelten. “It’s not just the price increases they [Owen Illinois and Saint Gobain] confront us with, but also the refusal to supply each other’s customers. This is a textbook case for Nelie Kroes at the European Commission and I know the industry is building a case. But that’s not going to help us this year.”
