Wild Lidl's Claret Of­fen­sive pay off?

The Daily Telegraph - Saturday - - Front Page - Vic­to­ria Moore

The so-called “Lidl Claret Of­fen­sive” is in full swing. The dis­count chain an­nounced in July, to a vol­ley of press cov­er­age, that it had in­vested £12mil­lion in a pro­mo­tion of more than 50 French wines, many of them from Bordeaux. The wines ap­peared in branches last week. A sec­ond on­slaught is sched­uled for Oc­to­ber 16.

The mis­sion ob­jec­tive is clear: win the hearts and minds of af­flu­ent shop­pers. But is this posh red putsch all it claims to be? What does it tell us about the fight on the high street for your wine pound? And should you be rush­ing to your near­est Lidl to fill the boot with cut­price claret?

The Claret Of­fen­sive works like this: Lidl has a very small core wine range that it rou­tinely sup­ple­ments with a tran­sient se­lec­tion. Th­ese are bought in as one-offs, piled up amid a great hul­la­baloo – and when they’re gone, they’re gone.

It has ex­per­i­mented with claret be­fore. Last year the Ger­man chain said it was “over­whelmed” with de­mand when it in­tro­duced shop­pers to a £19.99 bordeaux (a St Emil­ion, Ch Laroze 2007) – then the most ex­pen­sive wine it had ever sold. The seed was sown for a plan to lure in all those mid­dle­class shop­pers for whom the prom­ise of cheap qual­ity salami was not quite enough.

Lidl says its wine sales are up more than 20 per cent by value and 25 per cent by vol­ume com­pared with 2013, in the fi­nan­cial year to date. That might sound good, but the key is in the bal­ance of value and vol­ume. It’s sell­ing more wine, but it’s sell­ing more of it more cheaply. Also, in terms of of­fer­ing the sort of good-qual­ity wines at low prices that might ap­peal to Waitrose or Ma­jes­tic refugees, Lidl is be­ing out­classed by its clos­est com­peti­tor, Aldi, which sells bril­liant £6 gavi, rosé from Provence and sau­vi­gnon blanc, not to men­tion the best sub-£10 sparkling wine in the coun­try and a su­perb £12 cham­pagne. “Aldi is seen as a re­spectable place for ‘aspi­ra­tional’ shop­pers to go,” says one in­dus­try ob­server. “Lidl is just seen as cheap.”

Cue the Claret Of­fen­sive, a mass buy-up of some of the wines that Bordeaux né­go­ciants (mid­dle­men), strug­gling with cash flow after the de­ba­cle of the 2011, 2012 and 2013 vin­tages, are frankly des­per­ate to get rid of. Lidl claims to have bought five per cent of Bordeaux’s an­nual pro­duc­tion, which over the past five years av­er­ages 693mil­lion bot­tles. As five per cent of this is 34mil­lion bot­tles and I am told that a to­tal of 720,000 bot­tles – which in­cludes wines from all over France – have been bought for the UK, we have to as­sume this is a pan-Euro­pean fig­ure, with other coun­tries drink­ing a big­ger share. Rather less ex­tra­or­di­nary when you con­sider that Lidl op­er­ates in 26 coun­tries.

“With such a sig­nif­i­cant pres­ence, Lidl is able to lever­age enor­mous economies of scale,” says the su­per­mar­ket, and its claret of­fer has widely been touted as be­ing “cut­price”. Is it re­ally? Com­peti­tors sell­ing wine on a na­tional level have been por­ing over the four dozen new French wines in some ag­i­ta­tion and two told me that they see “noth­ing in the price of the lines we were able to trace that gives cause for alarm”. Ex­am­ple: Lidl is of­fer­ing So­ciando-Mal­let 2008, claret from a château beloved by Amer­i­can critic Robert Parker, at £25.99. Tesco has the (more highly rated by Parker) 2009 at £25.

Lidl is – like Aldi – free to ap­ply low mar­gins (Lidl did not say “no” when I asked if it sold wine at a loss): wine is used to drive foot­fall, and that both boosts sales gen­er­ally and freaks out the com­peti­tors – although as one com­peti­tor drily re­marks, “The lack of ne­go­ti­a­tion coun­ter­acts some of the mar­gin.”

In­deed. “We knew what we wanted and we went in and asked for it and didn’t mess around. I think some of the château own­ers and né­go­ciants were amazed,” Lidl’s UK buyer Ben Hulme told me.

True, the of­fen­sive has queered the pitch slightly for oth­ers. “There’s one né­go­ciant we use for en­try-level wines, and get good deals from when they’re des­per­ate: they have had so much money from Lidl that we’ll have to look

else­where,” says one buyer.

Hold­ing a big tast­ing of 3,000 wines in Paris, as Lidl did (the wines pre­sum­ably be­ing what­ever this or that né­go­ciant wanted to show them) then pick­ing the ones that taste best and then go­ing and ask­ing for them isn’t the best way to se­cure a bar­gain.

Nick Da­gley, who has been buy­ing claret for Ma­jes­tic for 10 years, says: “I know where there are parcels of wine. When I sense an ea­ger­ness to sell, if you get the right né­go­ciant work­ing for you, if you can of­fer brand ex­po­sure and brand-build­ing – you can make a deal.”

The Lidl wines were bet­ter than I ex­pected but not all that. My favourite was a fi­tou – Réserve de Fon­salis Fi­tou 2011 France (13.5%, £5.99, Lidl). It might not still be there: Lidl bought 10,000-30,000 bot­tles of each wine, which means that for many lines there are only 16 per store. Stick with Aldi, Tesco, Waitrose and Ma­jes­tic for now.

Sign of the times: Lidl has in­vested £12mil­lion in more than 50 French wines

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