Suppliers expect tough talks in 2010

More than 80% of suppliers expect major retailers to demand more margin on beers, wines and spirits in 2010, an exclusive OLN survey has shown.

However, 41.2% of those surveyed said they would be forced to stop supplying retailers if they did make such a demand. Over a third said they were exploring other channels due to supermarkets’ demands.

The results come as the pre-Christmas price frenzy stepped up a gear, with Sainsbury’s offering a week-long deal of 25% off six-bottle purchases of wine. Waitrose and the Co-op also have half-price deals on Champagne.

In the OLN survey, some 58.8% of suppliers said they expected negotiations with retailers to be tougher in 2010, although just under two-thirds felt the demises of First Quench and Wine Cellar hadn’t made relationships between suppliers and retailers any more tense.

There were signs of optimism for 2010 from suppliers, with nearly 60% saying they expected to be in a more profitable position by the end of next year.

One supplier said deeper discounting was inevitable in the current economic climate. He said: “The whole landscape of supply has changed, and will continue to do so next year. Retailers and suppliers have to put consumers first – they want cheap deals to keep them in the category.

“The industry has to stop blaming retailer deals and start coming up with solutions. We need to be more creative.”