Cheap wines apparently taste good in recession

by Tetsuya Katsuda

Kyodo News

Sales of low-priced wine are being buoyed by thrifty consumers, who are drinking at home more often instead of dining out.

Particularly popular are domestic wines ranging in price from ¥500 to ¥1,000, prompting bottlers to promote relatively inexpensive wines whose sales can grow even in tough economic times.

Hiroshi Ueki, president of major wine producer Mercian Corp., said homemakers are drawn to displays in supermarkets and convenience stores showing an assortment of low-priced wines.

Mercian posted a 4 percent rise in sales during the first six months of this year compared with the same period last year, although the industry as a whole is faced with a shrinking population and less alcohol consumption among the young.

The company raised its sales target this year by 6 percent, an increase of 4 percentage points from its initial estimate.

Suntory Wine International Ltd. reported that its sales of domestic wine jumped 21 percent during the first half of this year. It expects a 2 percent rise in its overall wine sales this year, with reasonably priced and high quality wine for home consumption driving growth, a company spokesman said.

A bottle of medium or high-grade wine usually costs more than ¥2,000 a bottle while low-priced domestic, “daily wines” sell for around ¥1,000 a bottle.

Strong-selling domestic products include Mercian’s “tasty antioxidant, additive free” wine in a 720-milliliter bottle, which retails for around ¥600, and Suntory’s Delica Maison Delicious, a 720-ml bottle priced around ¥400.

Nearly all such wines sell for ¥1,000 or less and use screw caps instead of corks.

A clerk at a Tokyo supermarket said customers buying the cut-price wines are mostly in their 30s and 40s, and that multibottle packs sell well because they are easy to carry and are relatively inexpensive.

The National Tax Agency said wine shipments were up 2.9 percent last year, the first increase in three years. Domestic wine shipments posted a 4.7 percent rise.

Japanese winemakers said shipments this year are also likely to be firm. While regular wine drinkers still tend to favor high-end products, workers who don’t expect to get a raise soon will continue to look for medium- and low-priced wines, according to a senior official at a winemaker.