Wednesday, 16 July 2014

A Plea to Bodegas to Seek Better Representation on Export Markets

Something which strikes me as a terrible shame is that many Sherry brands are either not available or difficult to obtain in Britain which is one of the more important markets. Many bodegas are only poorly or partly represented, and this must surely have a detrimental effect on public familiarity with the bodega’s name and its brands. It certainly makes it difficult for retailers to assemble a cohesive range of Sherries from a variety of bodegas.

One problem is split agencies, where some brands from a particular bodega are distributed by one company and other brands by another. Possibly there may be too many brands for one importer to handle, but apart from that I find it hard to understand how this arrangement could possibly benefit the bodega, and it is certainly very irritating for a retailer who has to open accounts with even more suppliers, each one with a minimum delivery quantity.

Then there are regional agencies. For example a major London (effectively UK) importer might have the UK agency for bodega X, and to make things easier they appoint regional distributors, in Scotland and Northern Ireland.  These distributors have additional transport costs and therefore pay more and have to charge more, so there are at least two different UK prices for the same wine.

This can surely be resolved by working on the logistics such as parallel shipping and minimum deliveries to arrive at a single UK price. After all we are mostly talking about firms who have large lists, so a minimum delivery of say 25 cases is easy enough if they are mixed. Another consideration is the use of local, possibly shared, bonded facilities, where wine can be stored duty and VAT free till needed.

The third bone of contention is whom the bodegas choose to be their UK distributors. Some, it seems to me, are just glorified retailers or local wholesalers who lack a nationwide perspective. If a bodega is serious about selling its brands in the UK or any other market it must appoint a nationwide or regional distributor with a big enough list and sales force to actively and willingly sell all its agency wines.

One solution to the problem is self-distribution. An exporter simply needs to set up a UK company to distribute its own brands, and if there are not enough brands or they are too specialised, then they can act as agents for other complementary exporters and work together. Another possible solution is the French system where “negociants” handle lots of wines, usually but not necessarily from a given area, so an importer can secure a large range from one source.

After decades of decline, Sherry – quality Sherry – is beginning to turn the corner, but it needs much more professional distribution and always backed by a marketing and promotional budget, along with, ideally, generic promotion from the Consejo. Without these, it will simply not achieve brand awareness nor, therefore, sales. Many bodegas have good representation, but many do not.

As a retailer who would like to offer a generous and interesting range of Sherries, I find it almost impossible to deal with lots of small companies all over the UK who often only offer part of a bodega’s portfolio. Many of these small firms make little or no effort to sell their agency wines beyond their own locality. They do not advertise, and it is hard to find out who ships what. The Sherry Institute has a list of UK importers, but it is incomplete, and perhaps it could be doing more for bodegas wishing to export. Wines from Spain/ICEX could also help, being subsidised by the Spanish Government.

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