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TWS List Oct19-Feb20 price increases

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#1

I was checking the wines I was interested in buying in the new list, comparing with the old one. I noted a lot of price increases, between 3-9%. A typical example is the Society’s Cotes de Bordeaux 2016 up to £9.50 from £8.95. An example at the lower end of rises is the Society’s Vinho Verde 2018 at £6.95 up from £6.75. At the higher end see Musar 2012 at £26 up from £24 (9% increase). I did not do a proper count but would estimate that about a third of wines are up by some 5% on average. What do people think, are increases well above inflation reasonable? Is the Sterling exchange rate a factor?


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#2

I have noticed increses of 5% on some of the wines i like. Apart from inflation and the sterling Euro exchange rate Brexit must be increasing costs. Having to import more in case of supply problems as a result of brexit must increase costs.
I am sure that Brexit when/if it happens will make wine more expensive . The additional paperwork involved will increse costs. Perhaps its a good investment to buy more of what you like now to save money later on.


#3

Interesting…I hadn’t done so in any exhaustive or scientific way, but my gut feel had been that there were a number of increases in that range.

£/Euro rate has been pretty stable in a narrow range since Jun 16, so I doubt if it comes from that, though £ has weakened more noticably v USD in last year, more a $ strength feature.

I wonder if it might be a delayed effect of currency hedges, or longer term supplier contracts rolling off?

Equally, I have noticed quite a few wines that I buy are the same price as they have been for a year or so.

A brief comment from WS might be in order as to what has contributed to price rises…


#4

Is there a new list? Does it come with the new Tastings list? Alghough I live near Stevenage, I always hear about mailings here several days before they arrive.


#5

I spoke to an independent wine merchant a couple of weeks ago because I was sufficiently surprised at the jump in their prices to actually pass comment. They said it was brexit affecting the exchange rate, pushing new vintage prices up and then also inflating the prices of any old vintages held by the big merchants/wholesalers. Net impact being that a number of wines would now be out of reach for me if I didn’t hold stock from EP campaigns. The particular worry is northern rhone, prices were climbing anyway and there are no shortage of other markets.


#6

I got both new list and events list (plus Society news etc.) through the post on Friday (followed by an email same day).


#7

It’s also possible prices were held for as long as possible but now they have to go up?

At £26 Musar 2012 isn’t noticeably cheaper than some of the other merchants tbh, unless they also follow through with a small increase.


#8

Me too…


#9

I suspect that Brexit will provide cover for many such things, it is likely to be true in a smallish way, but the big move in £ was June 2016 as I said above, so unless they have hedged forward for about 3 years (very unlikely), the currency isn’t really an excuse any more. Even less so the bit about back vintages, which smacks of opportunism to me…

Brexit, it just keeps on giving…:rage:


#10

I guess that TWS costs are increasing slowly all the time [changes to business rates, inflation, increasing supplier costs, freight costs as fuel prices rise, sterling depreciation (might only be 1% in 6 months, but it’s still 1%), mandatory employee pension contributions…utility price rises etc etc etc], but retail price increases happen less frequently, so when they do come, they look like a jump.

I’d only really be concerned if TWS price rises were significantly more than other wine retailers, and when I look around, I don’t see that. On like for like, TWS are usually the same or cheaper for the wines I buy regularly, except where other retailers are running obvious loss leaders (which I’m happy to benefit from, but don’t think it would be sustainable for TWS to follow suit, given that they’re not also trying to sell me overpriced groceries).


#11

I have just revisited the Annual Review to get a sense of what might be happening:

“Regular sales were up by about 3% compared with last year while turnover, which is stated after adjusting for en primeur sales invoiced to members in earlier years, was up almost 9% compared with 2017/18. Cases per member were slightly down again this year and the number of active members this year was flat compared with last year. Together, this meant that total volumes sold were slightly down compared with 2017/18 but as we have seen in recent years, average case price rose again.
This year we had good cost control and no unexpected defined benefit pension charges (2017/18 £1.5m) giving profit before tax of £1.6m compared with £978k last year. We were unable to declare a dividend again this year because the profit and loss account remains in deficit, but a prepayment of cash into the pension scheme has enabled us to reduce the tax payable this year.
Cash balances remain strong but we are planning for substantial capital spend in the next few years including on our IT system and Warehouse 5, and will plan to use those balances for that expenditure.”

And:

“Stocking up for Brexit, for example, has put even more pressure on already full warehouses, reducing their efficiency and adding to costs. We secured some warehouse space away from Stevenage to cope with the extra stock but it has brought to the foreground the need for more space and better warehouse systems. As a consequence we are actively assessing the most appropriate time to begin building our new warehouse (Warehouse 5) for which we already have planning permission.”

Reference to number of active members being flat, total volumes down but average case price up alongside the need to produce a surplus for future capital spend may go some way to explain the rises. Add this to general reduction in consumer spending as a result of the uncertainty surrounding BREXIT, the Society team may be just being prudent and protecting the financial health of the Cooperative.


#12

I think we’re just at the beginning of price rises (and declining availability). Fully expect £ to drop well below euro soon.


#13

Another way to look at it is…

If as the OP suggests, around 1/3 of the list has gone up by an average of 5%, and the other two thirds haven’t increased, that equates to an overall increase of about 1.7%, broadly in line with inflation…

I agree that there are assumptions and generalisations there, but without a spreadsheet of all the historic prices it’s hard to be more scientific…it also assumes that the prices haven’t gone up twice in a year.

The other factor is whether the price has stayed the same but quality isn’t quite as good. Subjective, and difficult to be definitive.


#14

Finding that many of the Spanish wines I enjoy are seeing price rises of 10% or so at source eg LRA 904, Gravonia, Contino reserva, Abel Mendoza whites, etc. Maybe rising demand or just undervalued previously. So not all about fx but that will be an additional cost for the UK Market. Backfilling on mature vintages is likely to be my strategy to offset the costs.


#15

Look on the bright side. When we are out of Europe, some non-EU wines will be free from EU tariffs and reduce in price. Australian wines should be 15-20p cheaper.


#16

There is no bright side to decline :frowning:


#17

Prior to us leaving the EU ( if we actually do leave the EU! ) I wonder what will happen to EU wine prices ( and the viability of vineyards ) given the US are about to slap a 25% import tax on them. I gather people in the European wine trade are more worried about this than Brexit


#18

The people I have spoken to in France (growers and retailers) are crapping themselves that the wines from the New World will overtake them in the UK sales ladder. Expect plenty of French Autoroutes blocked by unhappy farmers and perhaps a shortening of M Macron’s tenancy I suspect.


#19

Because we are currently in the EU we are part of the EU international trade agreements with other countries. Because the EU is a large block -even after Brexit it will be 500million-it has struck a good bargain with other groups of countries. Because we are very small in comparison we will not be able agree as good trade deals with other countries. So i dont expect wine prices to get cheaper from countries post brexit.


#20

I am particularly interested in why the prices have gone up now, rather than changes after Brexit. So do TWS buy e.g. Musar 2012 in multiple batches and have prices gone up at source, or do they just increase the price of the remainder of the current batch in expectation that they will sell anyway? And are the increases related to the timing of a new list, in which case I might change my buying habits?