The Polarisation of the Wine Trade

Centuries ago great satirists such as Jonathan Swift or Alexander Pope penned extensive critiques excoriating the smallmindedness of men. Today, we have social commentators like Richard Littlejohn. No, you couldn’t make that up. As far as a lot of people are concerned all is very much for the best in the hospitality industry; no-one in the trade wants to be seen to be rocking the boat, and talking down the business that feeds them. Maybe one should bite the hand more often, otherwise one is complicit in the bad practice that goes on. For years I have associated the wine trade with friendship and respect, but, recently, my image of it has been somewhat tarnished by witnessing the unfettered desire to win business at all costs and by a large number of restaurateurs who seemingly have no love for their suppliers and customers alike. It may be, of course, the case that such is the desire for survival that recessions naturally bring to the surface the basest instincts of humanity, for they also the purgative effect of shaking out the weakest operators, who long since bankrupted their good will..

Such musings were prompted by the effect of the publication of our latest list and the price rises contained therein… I have mentioned in previous articles that we have had to increase our prices by around 7%, to compensate for losses incurred from the big drop in exchange rate. One shouldn’t have to justify such price rises when it is quite simply a question of survival, since if we don’t make the adjustment and preserve our margins, we will go out of business.

Whilst lucid argument and sweet reason occasionally prevails we often deal with some veritable archbishops in the benighted confederacy of bullies and dunces, those lumpish earth-vexing fustilarians whose breath-taking chutzpah borders on the arrogant. We’ve been dealing with one particular beef-brained operator, a plain bully, who has steadfastly refused to accept any price rises, the kind of guy who is so narrow minded he could see through a keyhole with both eyes. To adapt Carly Simon: He’s so vain he probably doesn’t understand that this song is about him. I wonder if these people are congenitally mean; if that is the case what are they doing in hospitality which is about the love of food and the love of feeding people. Showing people a good time stems surely from a naturally generous impulse. So, if they are not mean, perhaps they are wholly ignorant of what goes on in the trade; they know so little and they know it fluently. Many restaurateurs are prima donnas and seem to float in a bubble of sycophancy, one wherein no-one has confronted them or challenged their preconceptions, and, consequently, over time, they have developed a monumental self-regard.

I have had the dubious pleasure of negotiating hundreds of prices during the average list change. It is never a pleasant process and you feel more than slightly sullied by the whole experience. In the end you twist, you tweak, you fiddle towards a compromise. 90% of the giving is on the merchant side though, the restaurateur brandishing the macho trump card, the threat to withdraw business completely unless demands are met in full. The philosophy is scrunch or be scrunched, as articulated by the modern day weasel-Boffins. Business is business for a’ that.

Not that you earn any respect for compromising; instead you temporarily redraw the line in the stand, one which will be stepped over on countless subsequent occasions.

I wonder how far you can divorce morality from your business. A mentality that exploits suppliers, also probably abuses staff and disrespects customers. Greed is not good; it demonstrates weakness and ultimate lack of faith in quality and usually leads to karmic payback. When I talk to some restaurateurs I realise that they will never respond to rational argument for they see the world dimly through excessively frosted, triple-glazed egos.

Do-as-you would-be-done-by is a mantra that most people would have no trouble endorsing. Except in business. Business relationships, like five pounds notes, are paper thin; agreements have no validity unless underpinned by written contracts and loyalty is an aerial as an angel’s good intentions. Wine merchants are constantly enjoined to look at the bottom line profits of their customers; those customers, however, are rarely capable of seeing how sustainable margins are just as vital for wine merchants.

Flip the relationship on its head to understand its true dynamic. A wine merchant goes to a restaurant and eats a hearty meal. He is presented with the bill, looks at it, and says, “Thanks, but I’m trade. First you must give me 20% discount. And then I would like a free glass of champagne with every meal. And every Christmas I want to take my entire staff here for a free meal”. He then says, “I’m not going to pay the bill now but in 30-45 days. By the way I’ll probably forget so you’ll have to remind me. In the mean time I’ll come back and have lunch regularly on the same terms; I won’t pay because it is an honour for you to have me dining at your restaurant”. One day he comes in and sees that the prices have been put up: “I’m not going to pay the new prices; you must keep them the same as before otherwise I will stop honouring you with my business”, to which the restaurateur replies: “You come in here, you carp and criticise, you eat our food and drink our wine, and then you pay when you feel like it.” The wine merchant snorts and expostulates: “Well, if that’s your attitude I will take my business elsewhere.”

An idle thought.

We are now witnessing, as never before, the polarisation of the wine trade between those merchants that pursue quality and those that chase volume turnover. The latter companies shape winner-takes-all proposals based purely on psychological price points, a kind of vulgar gross profit determinism. Their wines, being mass-produced and often branded, are at best inoffensive and usually grimly dull. These merchants are effectively prostituting themselves to carve out greater market share.

With their greater desire for quality, certain smaller wine specialists have both to take advantage of niche markets and create new ones. Rather than scouring the highways and byways to fit the wine to the price point, these merchants source what they believe to be good, and forge strong relationships with their growers, engaging with the spirit of their wines. The notion of “real wine”, for example, arose from a style of natural, unmediated, unpretentious wines that we enjoyed drinking ourselves and felt very proud about selling. It entailed pursuing a specific direction in the wine buying rather than pretending one could be all things to all people. Some customers respect those who have the courage of their convictions, but it is a matter of converting this respect into commercial listings.

Restaurants have to decide whether they want to grow their business quantitatively or qualitatively. If they decide the former they will be content to dumb down their offering and play as much hardball as it takes to ground out their inflated margins. It will mean that wine merchants will suffer because they will never be able to raise the ceiling on their prices. Alternatively, restaurateurs can re-examine their business ethos, respect their suppliers and their customers and try to build the foundations of something intelligent, lasting and purposeful. Value for money is not about being cheap-minded; it’s about treating other people as if they are special.

Posted by Doug on 18-Mar-2009. Permalink
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