Big fish eats medium size fish

Wine merchant monopoly.
There is one sure way of getting ahead in the wine trade. And that is to buy your business. This works in several ways.

One is to accede to any demand your customer makes regardless of economic sense. For example, you allow yourself to be embroiled in a discount auction with lubricants of free stock, retrospective discounts and cash gifts. Or you offer a massive premium for sole supply. Cash is jack, queen, king. An American international hotel food and beverage manager told me that of all the countries he visited the UK was the only one where wine merchants were falling over themselves to trade cash for listings. This is bad precedent because it relegates wine to a mere commodity, product bought and sold at the base level to satisfy over-the-top margins and balance sheets. The corporate ramraiders will always get the business because they can pay top dollar, but what is the point when it costs you so much to do so?

The other way is to buy a business with good agencies and strong turnover and to graft that on to your own. Several big companies have engaged in mergers recently. Part of the reason is that the larger company can fill gaps in their list and gain credibility with better agencies. This truly is the lazy approach to buying wine – just buy someone else’s wine instead! Another reason might be that the other company operates largely in a different region of the country.  The third reason has the basest motive which is to take out a competitor and assume their turnover as your own.

The result of mergers is that there has to be a sacrifice of personnel as operations are centralised. The whole feel will naturally be more corporate as the human component of the small company is compromised and the loyalty of the people who work for it destroyed. This is never about two being better than one, but the big one subsuming the small one.

We’re a small to middling size wine business, fiercely protective of our values, our independence and our identity. When you have literally built from nothing, acquiring knowledge of running a business along the way, putting together a team that cares deeply, assembling a fine portfolio of small growers, and generating good will amongst your customers, well, you wouldn’t want to give it away.