High-speed market for Aus wine

02 Jul, 2015 08:31 AM
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Total sales to Japan are close to $1 million and the company is branching out
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THE high-speed Japanese bullet trains have been a much better bet for Cassegrain Wines managing director John Cassegrain than Australia's liquor giants Woolworths and Coles.

The NSW-based wine producer supplies about 700,000 small bottles of red and white wine each year to the operator of the Shinkansen bullet trains, JR Tokai, which hurtle around Japan at speeds of up to 320 kilometres an hour.

Mr Cassegrain, who operates the small winery at Port Macquarie on the NSW mid-north coast, says Japan now represents about 20 per cent of his total sales and he has been supplying the bullet trains for more than two decades.

"We've been doing that for 20 years or so," he says.

Mr Cassegrain says business is brisk for the 187-millilitre bottles available on the trains.

He says total sales to Japan are close to $1 million and the company is branching out into sales to regional supermarkets in Japan to generate more growth and take advantage of the free trade agreement which officially came into force in January between Japan and Australia after seven years of negotiations.

'Colesworth' out of the loop

Mr Cassegrain is hoping his experiences with supermarkets in Japan will be better than those in Australia.

His winery produces the equivalent of about 50,000 cases of wine a year and exports represent about 36 per cent of total sales. His wines are not available in the big supermarket chains Woolworths and Coles.

"We no longer supply the major supermarkets," Mr Cassegrain says.

"We weren't getting much joy from the supermarkets. They were very hard to deal with."

The company instead now sells through independent liquor stores only, plus its own direct selling, which Mr Cassegrain says has caused some short-term financial pain. That decision was made in 2011 and caused a dip in profits initially.

"Obviously our selling costs increased. But there are better rewards at the end."

Grocery suppliers to the big supermarket chains are hoping the federal government's new code of conduct aimed at curbing unfair treatment of grocery suppliers will deliver a better outcome in negotiations.

Former Victorian Premier Jeff Kennett was appointed an independent arbiter by Coles last year after the Australian Competition and Consumer Commission (ACCC) took Coles to court over claims of unconscionable conduct towards some suppliers.

On Tuesday, he ordered Coles to repay more than $12.3 million to small food and grocery suppliers that were forced to pay extra rebates to join a new supply chain program, or fined over late deliveries or spoilage in Coles' stores.

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