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Written by Richard Siddle
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Friday, 05 September 2008 |
Two of the drinks world's superpowers flexed their corporate strength this week to remind everyone in the sector of the breadth, range and importance they hold over branded drinks in this country.
Pernod Ricard, courtesy of our exclusive interview with new wine director Nick Blair, has re-iterated its position of becoming the number one wine brand in all the major categories which it is involved with. Be it Argentina to Australia.
But the fascinating news comes from Diageo with a statement this week that makes it clear it is effectively looking to regain control over its brands with new retail terms that it hopes will draw a line under big chains introducing promotions and deals beyond its control.
It seems Diageo, for one, has had enough of seeing its carefully developed strategies for its major bands thrown away with an unplanned half price slashed deal in a supermarket.
In a press release it makes clear any investment it makes with the trade will now "be structured and measured in a way that requires all customers to deliver a variety of proven sales drivers", But crucially it goes on to say that "payment will only be made when activity has been implemented and that implementation evaluated". Or in other words work to our agreed plans or you won't be getting your kick-backs.
Each retail channel will be given its own price list to work to, with investment geared around "scale discounts, efficiency discounts and sales drivers". Diageo also talks of its "unique position" as Britain's main spirits supplier "to be able to influence category growth". Or at the very least decide what it wants to do rather than have discounts thrust upon it.
It is has been some time since a major drinks supplier has looked to wrestle control back from the power of the big supermarkets and the fact some of those chains we contacted were not aware of the new terms demonstrates a clear purpose of intent.
It will be interesting to see how the major retailers respond, and whether the other drinks players follow suit.
Richard Siddle is editor of Harpers Magazine
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