Supermarket price wars pander to our love of a bargain, but as growers struggle, we could regret our penny-pinching ways
It's wine-tasting night at Ten Green Bottles in Brighton and a table of thirtysomethings are listening as the proprietor talks enthusiastically about a smoky syrah-cabernet from South Africa.
Runa is celebrating her 38th birthday and she and her gaggle of friends are enthusiastic, if a little tipsy. "This is something different," she says. "I think everyone's finding it really interesting and fun."
They may not be experts, but they seem to know their chardonnay from their chenin blanc, and they admit to regularly paying more than £10 for a bottle of wine in the supermarket.
But they are the exception, not the rule. According to research by drinks specialist Harpers, just 7% of us are prepared to part with more than a tenner for a bottle of wine. Men are more likely to spend £10 than women – 9% versus 6% – but the majority of us – 54% – refuse to spend more than £6.
There are big regional differences too. Londoners, predictably, are the biggest spenders, but the disparities are wider than you might expect. Only 12% of Londoners shop in the basement category, buying wines at less than a fiver, for example, compared with 41% in the West Midlands. In the north-east, only 2% are happy to spend more than £10.
True, we've never been a nation of wine experts, but Britain's post-recession love of a deal has left us more concerned about price over quality than ever. And as the supermarket price wars continue apace, there is a real danger that Britain's wine industry could be on the verge of a major dumbing down.
The research reveals that a third of us can't name a single grape type and only 4% can name more than 10. Overall, women are far less knowledgeable than men. During the past year, more than 80% of bottles sold in the retail sector cost less than £6.
Against that backdrop, Simon Broad took a risk opening his Ten Green Bottles wine bar-cum-retail outlet – even in trendy Brighton. But he's hopeful that if wine is made more accessible, people will gradually start to spend more. "We want to get people excited about wine," he said. "But you have to invest time learning how to appreciate it."
It's a big ask. Just around the corner is the Heart & Hand pub. Bartender Maddy, 21, is lining up shots for a group of young women.
"You get a lot of demand for shots, beers and fruity ciders here, but you don't get many people drinking wine," she says.
Maddy buys the occasional bottle of wine to drink at home with friends, but she never spends more than £6 and she admits knowing nothing about the different grape types. She'll pick out a pinot grigio from a supermarket shelf, but she admits it's only because she recognises the name. And this is a bartender talking.
Getting young consumers such as Maddy to engage more with wine is the industry's biggest challenge, according to Harpers. More than half of the 18- to 24-year-olds interviewed in its survey said they normally only buy wine if it's on promotion. Around 86% admitted to regularly switching retailers to find better deals.
One way to attract people like Maddy is to make wine "less winey", said James Burston, business development director at PLB – Britain's largest independently owned wine distributor. The industry needs to break down its intimidating barriers, he says, and stop being the victim of its own insular parameters.
The stakes are high. "The UK wine market is going through a period of seismic change," said Burston. "There will be casualties, and there may well be consolidation and collaboration."
Making cider less cidery has certainly worked wonders for that industry. New flavours, packaging and the use of ice have turned that market round. Could that provide a model for wine? Burston thinks it could.
"Cider became more accessible and suddenly the whole category exploded back into life, from entry level through to premium and niche," he said.
Wine is a much tougher proposition, though. Jeremy Rockett, marketing director at Spanish-owned distributor Gonzalez Byass, believes wine is a fundamentally confusing subject. "You go into a supermarket and there's a wall of products that all look broadly the same," he said. "There are 900 glass bottles of similar size and shape, but different countries, different grape types – many you've never heard of – all with different prices . Where do you start as a young person? It's really, really hard."
The supermarkets – notably Tesco, Sainsbury's and Asda – play a big role in determining which wines we drink, according to the research. That's where we buy most of our booze, after all. And the big chains love selling us wine because they view it as a way of driving up their footfall. Pricing has never been more competitive – two, or even three, bottles for a tenner is a common deal.
The problem for the wine producers is that the profit margin on wines sold for less than £6 a bottle is tiny. UK duty (and VAT) rates are among the highest in Europe, so on a £5 bottle, 60% is swallowed by the government.
Once you've deducted distribution costs, the middle men and the supermarket's margin, there's very little left over for the producer. Small wonder that it's not a sustainable business model except for large-scale producers.
That raises two potentially big problems, according to Harpers. The first is that even those bigger suppliers might pull out of the UK market over time, as they eye up more lucrative opportunities elsewhere. Even if they stay, the other worry is that Britain – with its focus on cost over quality – will increasingly become a dumping ground for surplus supplies of wine.
As one supplier – who asked not to be named – put it: "The fact is, it's hard to make any money in Britain, but it's a great market if you want to get rid of bin ends or if you've got tanks to empty for the next harvest. You chuck it in the UK's direction because there they'll suck in cheap wine."
The UK is still the world's biggest importer of wine, but the market has reached a tipping point. According to the data, half of us are open to learning more about wine, yet when asked about our intentions for 2014, half of us also say we are planning to spend less on wine this year.
There is nothing the wine industry can do about the economy, taxes or supermarket wars, but it can do more to engage with consumers, especially the younger generation like Maddy. And if it doesn't, the dumbing down trend looks set to continue.
The full report, Demystifying the Consumer, will be published next month by Harpers, a division of William Reed Business MediaThis article was written by Rob Walker, for The Observer on Sunday 6th April 2014 00.05 Europe/London
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