We all know how concentrated the volume of Australian wine sold in Canada is: A handful of suppliers have the lion’s share of the market. However, all these companies have some sort of financial trouble, or historically-low profitability. The question is: How will this affect the quality of the Australian wine we drink in Canada?. If the exchange rate keeps hurting profits, the prices of oil go up due to the Egypt domino effect in the middle east; Aussie suppliers will see their margins erode further, this might result in either price increases or maybe an adjustment in what goes in the bottle.
Think of the Canadian Wine market as your longer-term investment. It’s hard to get in, slow-moving, but once you are in, you are in; at least as long as your sales volume is decent. I hear and read stories about how suppliers get bullied by retailers in the UK (sorry Tesco), or about how much it costs to do business in the US, and I think: well, we are fortunate here in Canada. Although selling to the liquor boards is a unique experience, this market offers size, stability, and most of the time, good margins.
Tip: Never go low on your FOBs in Canada, once you position yourself in a price range, it will be very difficult to move up. Try to sell at premium prices, liquor boards love that, and you’ll have more money to invest in your brand. I know many people who got desperate to get in and went low on the FOB; now they regret it.
Canada is a unique market when it comes to wine, not only is this great country one of the largest in the world (#2 in size, actually), but it has unique characteristics that make it a very unique market. Here are a few particularities of the Canadian Wine Market: