Gazumped again! Just as I was about to print that it was surely a matter of time before one of the larger wine retailers took Wine Planet out of the equation comes breaking news that Fosters Brewing, owners of Mildara Blass and Cellarmasters, have signed a heads of agreement with the board of Wine Planet to take out a 25% stake in the dynamic Internet company. In a move which could well propel its wine club business into global leadership of these contemporary forms of wine retail, Fosters has also invested in the US’s direct wine business Windsor Vineyards, the country’s second largest but most profitable direct wine marketer. Mildara Blass will acquire 100% of Windsor Vineyards, which has also a growing Internet business. The Windsor Vineyards operation sold 190,000 cases in 1999 and includes state-of-the-art sales and distribution facilities in California and two wineries in New York and Florida and brings the total number of Mildara Blass’ direct wine customers to over a million people worldwide. Its total investment in these two ventures is in the order of $100 million. Founded in April 1999, Wine Planet (www.wineplanet.com.au) is currently Australia’s pre-eminent Internet wine retailer and achieved its first $1 million month in the 20-day period leading up to December 15, 1999. It’s easy to speak with the benefit of hindsight, but I found it difficult to avoid the impression that given the extent of its substantial discounting beneath the advertised price of other major wine retailers and discounters, that Wine Planet was setting itself up to be bought out. The larger it became and the wider its spread, the less its presence was likely to be appreciated by those more concerned with making a return on sales rather than increasing market share. I was waiting for either Woolworths (owners of Dan Murphy), Coles Myer or Cellarmasters to perform the deed, with my money actually on Woolworths. It looked cheaper to make an offer for Wine Planet than constantly fight its effectively publicised pricing policy. The approach taken by Fosters effectively retains Wine Planet’s independence, for the time being, while giving it capital to expand into the UK and other European countries, the base of the Mildara Blass wine clubs. Look out UK, which has no effective online retailer at present, for Wine Planet is heading your way. Fascinating stuff, really, and sure to put not inconsiderable pressure on the recently over-subscribed Winepros venture, whose $25 million float and heavily promoted but yet to be delivered wine information and sales network has claimed from the outset its intention to become the Internet portal to all things to do with Australian wine. Key players in the Winepros operation, currently found at www.jameshalliday.com.au, are HarperCollins, James Halliday and Len Evans and the first clue as to how it can be expected to return a profit comes with the news of its link with the very successful Vintage Cellars operation. At this stage it is not clear as to whether Vintage Cellars is the exclusive retail arm of Winepros or whether other retailers will be invited to participate, although Vintage Cellars’ Coles Myer affiliate Liquorland has been announced as Winepros’ preferred Australian retailer. Other Australian sites presently offering a competent Internet-based wine retail service include The Australian Wine Centre in Sydney, plus Nick’s and Philip Murphy in Melbourne.
