The absolute power of the retailers

Orlando, which has a portfolio of best-selling labels including the mainstream brand Jacob’s Creek, as well as Wyndham Estate, Poet’s Corner and Richmond Grove, has also made a AUD 29 million provision for restructuring as it tweaks its operation to cope with the downturn, media reports claim.

Orlando’s Managing Director Stephen Couche was reported as saying that the wine glut and the global financial crisis had created the most difficult conditions for the wine industry he had experienced.

He added that the British market was particularly tough, with poor trading conditions compounded by the fact that more than 70 percent of wine was sold through only five supermarket groups.

The ‘‘extreme retail consolidation’’ in Britain had handed retailers power to charge hefty sums for including Orlando’s brands in marketing publications and store promotions.

‘‘It’s not difficult to sell wine but it is to make a profit, and we have taken the decision to walk away and lose market share on promotional activity [in Britain] because it is just unprofitable,’’ Mr Couche said.