Top of the pops

March 20, 2012
The Age

Costco is determined to be a leading player with offerings from producers such as G.H. Mumm.

Costco is in town and that’s good news for consumers of fine wine, writes Jeni Port.

COSTCO cemented its name as the biggest wine retailer in the US by selling bottles of Dom Perignon for $US100 a pop in 2006. That little bit of marketing chutzpah reportedly moved more than 100,000 cases of Dom that year and helped propel what had been regarded as simply a “big box” discounter into the orbit of the serious wine drinker. It was like honey to a bee.

Has Costco’s first venture into Australia, at Melbourne’s Docklands, provided the same alluring honey? This week Costco did indeed have bottles of Dom Perignon, right next to the 1.5-litre magnums of ’04 and ’05 Grange and the ’06 Chateau Margaux. The 2002 Dom — a good year, not great — was available for $174.99 a bottle.

It’s not $100 but relative to its competitors (the ’02 ranges from $199 to $332 in Melbourne) it’s a bargain. And it wasn’t alone..

You had to be there, literally, to find out what was being offered in the wine “department”, a modest rectangle of space hemmed in between fresh flowers and cigarette sales, because Costco does not advertise. You also had to be a member, which costs $60. “Costco sells wine under the radar,” says a Victorian-based wine producer, who objected to having his low, low Costco-priced 2009 cabernet sauvignon (Costco $29.99, normal retail price $40) identified in this story.

He was concerned, he said, that the publication of his wine at a ridiculously low price would damage his relationship with the big forces in Australian wine sales: Coles (Liquorland, Vintage Cellars, First Choice) and Woolworths (Dan Murphy’s).
Costco, he claims, uses wines such as his to attract a higher socio-economic group of people into the store who will spend more. Getting people to spend up big is the beating philosophical heart of Costco because the company works on the skinniest margins imaginable — reportedly about a 10 per cent to 15 per cent margin and 3 per cent operating profit. Fast turnover is the driver.

The Melbourne Costco wine section has hints of a regular wine store about it with a central aisle of upmarket wines packed in nice wooden box-ware while the cheaper stuff is stacked on industrial shelving to the side. There is plenty of space to move — it’s needed for the Costco super-sized, deep trolleys.

The big-name wines are priced at healthy discounts (see panel), with champagnes leading the way. Wine marketing consists of basic shelf-talkers with a quirky Costco proletariat simplicity, hence the bubbles of the non-vintage Veuve Clicquot are “rich and never overpowering”, the Louis Latour 2008 Puligny Montrachet ($43.49) is “frank and elegant” while the Clefs des Papes Blanc Chateauneuf-du-Pape ($27.98) is simply a “great wine to drink with food”. One shelf-talker, for the Jansz non-vintage sparkling from Tasmania ($17.79), posts a rating score of 91 points but by whom isn’t made clear.

Wines can change pretty quickly. Once a wine is gone, it’s gone. Some unfamiliar names roam the shelves. These are recession-busting types priced down, led by Costco’s own private label, Kirkland Signature, which has been around since 1995. The wines are made in small lots (reportedly 2000 cases each) and created for Costco by winemakers from regions such as Champagne, Central Otago and Sonoma Valley.

The Kirkland Signature non-vintage champagne ($32.99) is from Roland de Bruyne and Manuel Janisson of Champagne de Bruyne: a forward wine, well-developed in flavour and colour with toasty appeal that shouts “wedding toast” fizz. You could do worse.

The Kirkland Signature 2009 Sonoma Valley chardonnay ($12.99) does not name the producer behind it (I could say something here); enough to say it is an old-school, buttered-up, tropical fruit bowl of a chardie in a style that was once hugely popular, now only mildly so. You could do worse. Could this be Costco’s own-brand catchcry?

The Kirkland Signature Rutherford Napa Valley 2009 meritage (a cabernet sauvignon blend, $19.99) offers a cheery but easily forgettable drink, while the Kirkland Signature Alexander Valley 2008 cabernet sauvignon ($13.49) attempts to muscle up, offering far more savoury and oak flavours than its Sonoma cousin, but ends on a bitter, smoky note.

If those four wines are representative of Costco’s own-brand wines, I’ll pass. There are so many more inviting wines from Europe to discover on Costco shelves, at prices that encourage you to try at least one bottle, such as the hearty, comforting Clefs des Murailles 2009 from Vacqueyras in Chateauneuf-du-Pape ($14.99), a grenache-based blend that lasts and lasts with a savoury, liquorice, raspberry-fruited intensity.

Then there’s the Araldica 2006 Flori barolo. I can’t believe the price: $17.49. Such a pretty and expressive young nebbiolo bursting with cherry, raspberry freshness and enticing florals but do not forget to decant.

A lean 2007 Chateau Tayac Cru Bourgeois from Margaux, Bordeaux ($26.79), is more than passable with a smoky cigar-box charm. William Fevre’s Champs Royaux 2010 chablis is well-known and liked for its mineral fineness and appears to have been imported direct and not through Negociants Australia, or so the price would indicate, at $19.48.

If Costco is to be a leading wine player on the scene, and it appears it might be with news that it plans to open more stores in Australia, then Coles and Woolworths have serious competition heading their way.

As one large Australian wine producer, who supplies and enjoys doing business with Costco, told me: “Anything that reduces the dominance in the market of the supermarkets is good for suppliers.”

And, of course, has to be good for wine drinkers.

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