The Wine Society has dropped all delivery charges to its customers in a move that could prove problematic for independent merchants, who are already battling to mitigate rising costs.
“They’re the new Amazon of wine,” says Anthony Borges, owner of The Wine Centre in Great Horkesley, Essex. “How can anyone compete?”
Borges says small businesses like his face problems obtaining competitive rates from couriers. “Either our turnover is too small and the big boys just aren’t interested – or alcohol and liquids are prohibited,” he says.
“The strange thing is, the same companies who who put these limitations on their courier services seem to be distributing for the major drinks multiples.”
For more than 20 years, Borges has used a local courier, Tendring Express, a franchise of the national APC network.
Although Borges argues that its rates are higher than he would like, “I lived with it, since website sales were always small”.
He adds: “However now, with a new website, and the increased effort in making it work better for us, I feel a stronger need to be more competitive with our courier charges.
“We charge £9.99 per address, up to 45kg. On small packages of one or two bottles we make £1-£2 profit. Obviously we make more on 12 bottles because of the increased margin in cash terms.
“A £9.99 charge on a small £30-£50 gift is too high – we know that. But we have no choice because of our high costs. Even on a case of wine of £120-plus it is considered high. We know for a fact we have lost custom because of it.”
Borges is hoping there could be a way of indies pooling their buying power to obtain better courier rates to compete with larger players like The Wine Society.
With wine prices and shipping costs going up too, it’s the perfect storm of everything coming together
Julia Jenkins of Flagship Wines in St Albans says it was “a big surprise to see The Wine Society offering free delivery across the board, especially when fuel prices are going up so significantly and most delivery companies are adding a fuel surcharge increase”.
Flagship Wines does have “some crossover in lines with the Wine Society”, she says.
“Fortunately there are not too many for us, but people do make generic comparisons, like with a Chilean Merlot, to give one example.
“I think people are realising there is a cost to having goods delivered, but free delivery is very attractive. It makes you wonder how sustainable it is.
“With wine prices and shipping costs going up too, it’s the perfect storm of everything coming together. We are being extremely careful how we send things out and we are managing our costs to the nth degree.
“We offer free local delivery for orders over £60 and we are managing to keep to that, but that’s very local deliveries. Apart from that it is £10 per delivery and it’s a matter of working out how to keep that going.”
Wayne Blomfield at Park Vintners in London says: “I’m sure everyone has some overlap with The Wine Society. I think you’d have to work really hard not to have something because of the mix of their own-label stuff and recognisable brands.
“I would argue that everyone’s real competition is The Wine Society.
“We have always been very open about couriers. We charge the customer exactly what the courier charges us. We don’t send a lot out. I think we’ve sent maybe four cases this month; we’re mostly local delivery that we do ourselves.
“Delivery does cost, and I suspect that The Wine Society will adjust their prices upwards to make up for it.”