Costco to sell fine wine in the UK

Costco’s director of wine buying Annette Alvarez-Peters may have caused controversy earlier this year when she slammed wine as “just a beverage” and “no different than toilet paper,” but the company – the world's largest wine retailer – is on a fine wine offensive in the UK. News has emerged this week, as reported on db.com, that Costco is branching out into the UK market, having launched a UK website, Costco.co.uk, selling high-end wines and spirits.

Open to both Costco members and non-members, the site, which went live last week, features a 131-strong wine and spirits range, including Champagne big guns Cristal, Krug and Dom Pérignon, and classed growth Bordeaux from the acclaimed 2009 vintage. Topping the offering is a bottle of Taylor’s Scion Tawny Port dating back to 1855 housed in a bespoke crystal decanter, which is on sale for £1,599.99.

 

Meanwhile, a single bottle of Château L’Eglise Clinet Pomerol 2009 is priced at £339.99, while the same vintage of “flying fifth” Château Pontet-Canet is going for under a third of the price at £99.99. At the value end, a bottle of Saint-Julien estate Gruaud Larose’s second wine, Sarget de Gruaud Larose 2009, is priced at £18.49, while Haut Médoc estate Château Senejac 2009 costs just £15.49.

Among the sprits on sale are Patrón Tequila, Ciroc Vodka, Johnnnie Walker Blue Label, Courvioiser Cognac and English Vodka brand Chase. Delivery is free, and Costo’s online customers will be treated to exclusive offers. It will be interesting to track how Costco.co.uk performs. The UK wine market is a crowded place, and in order to thrive, a merchant’s offering has to be both compelling and unique.

New York-based online merchant Lot18 is a recent casualty, closing its UK operation in July after just four months, blaming the supermarkets’ stranglehold on the UK market and a lack of anticipated growth for its exit. Is Costco.co.uk appealing enough to lure customers away from the might of the supermarkets, Majestic, and the increasing number of savvy online-only merchants entering the market? Only time will tell.

“Wine is no different than toilet paper”

One of the most powerful wine buyers in the world, Annette Alvarez-Peters of Costco, has slammed wine as “just a beverage” and “no different than toilet paper.” As reported on thedrinksbusiness.com, speaking in a CNBC news report this week, the director of wine buying for the world’s largest wine retailer said: "Is wine more special than clothing? Is it more special than televisions? I don't think so."


When CNBC presenter Carl Quintanilla offered that wine was different to toilet paper because it’s personal, Alvarez-Peters replied: “People can look at it that way, but at the end of the day it's just a beverage, you either like it or you don’t.” Alvarez-Peters is in charge of over US$1bn in wine sales per year, including fine wines like Château Mouton Rothshild and Château Pétrus.

She is also in charge of setting prices on wines that affect most of America’s small wine retailers, as well as heading a team of 17 international and domestic wine buyers. Before taking on the role of director of wine buying, Alvarez-Peters worked as a buyer in Costco's electronics division. She had no wine and spirits knowledge.

“I’m an employee of Costco that happens to oversee the wine category,” she told Quintanilla. Last year, Alvarez-Peters was voted the sixth most powerful person in the wine world in Decanter magazines biennial power list. Costco is the largest US importer of French fine wines, none of which are marked up more than 15%. Alvarez-Peters keeps the Costco wine selection down to just 200 lines at any one time.

Costco is the largest membership warehouse club chain in the US, the sixth largest retailer in the US, and the seventh largest retailer in the world. This week, the retail giant will be jostling with Woolworths and Coles in Australia to offer the lowest price for Penfolds Grange 2007, set to go on sale on Thursday. One of the most anticipated launches of the year in Australia, the RRP for Grange 2007 is AU$625, but it is thought that the big three will offer it for significantly less.