Loophole gives Bright and Cartier great exposure

Now that the merger of T.G. Bright and Cartier & Inniskillin Vintners has been declared legal and binding, company managers will be able to benefit from a quirk in the law to vastly expand the effectiveness of their privately run retail...

Now that the merger of T.G. Bright and Cartier & Inniskillin Vintners has been declared legal and binding, company managers will be able to benefit from a quirk in the law to vastly expand the effectiveness of their privately run retail operations.

The good news for thirsty consumers is that the various wine brands produced by the yet-to-be-named firm will become more accessible than in the past – and they will be available in more high traffic outlets inside or near grocery stores.

With the completion of their merger earlier this month, T.G. Bright and Cartier & Inniskillin Vintners will operate a combined total of 135 retail outlets.

Four of these are Inniskillin stores picked up by Cartier when it bought Inniskillin Vintners in 1992.

Cartier brought 54 Wine Rack outlets to that corporate marriage.

More recently, T.G. Bright added 76 outlets operating under a trio of labels: Brights Wines, The Wine Store and Brights House of Wines.

Under the terms of the merger, Cartier has been folded into T.G. Bright, while Inniskillin operates as a wholly-owned subsidiary.

Why the merged firm of T.G. Bright and Cartier will be a more effective retailer than were the former separate entities relates back to the free trade deal and a compromise agreement struck between the Canadian and u.s. governments.

Before the signing of the deal, the u.s. government demanded that u.s. wineries should have open access to Ontario retail channels for wine, including the right to establish company-owned wine stores.

Further, the u.s. contended that if its wineries were not allowed to open company stores, Ontario wineries ought to have to close theirs.

The Canadian government balked at the idea of shuttering Ontario’s 326 outlets. Eventually a deal was reached that the stores could remain open, but no new licences would be issued.

Although the retail stores offer Ontario wineries a distribution benefit not enjoyed by outsiders, the value of the stores is crimped by a regulation permitting them to sell only company-made wines.

It is this restriction that drove the merger of T.G. Bright with Cartier. As a consolidated winery, the firm will be able to stock each of its lengthy list of wine brands in any of its 131 stores.

Moreover, it will now have the clout to physically shift its existing stores to more lucrative locations inside or close to high traffic grocery stores.

Developing a broad network of grocery store outlets is a key element of the company’s marketing strategy.

Currently, 32 of the company’s outlets are located inside grocery stores.

David Hurdon, director of retail operations for Cartier, notes ‘wineries have always taken advantage of the natural synergy between food and wine by choosing retail locations as close as possible to grocery stores.’

Significantly, the more stores a winery maintains with a given grocery store chain, the better it can develop joint marketing programs with the retailer.

Jim Berry, vice-president and general manager of T.G. Bright, says most wineries do not have enough of a presence in one grocery chain to make cross-promotions worthwhile.

Berry says T.G. Bright has been able to advertise with Ottawa-based Sobey’s because it is the only wine retailer operating in the chain.

Berry says he hopes the expanded retail network that results from the merger will enable the company to do more advertising and promotions with other supermarkets.

While wine stores have, in the past, placed in-store advertising in the supermarkets, or occasionally participated in regional supermarket ad programs, any real opportunity for joint marketing activities was nipped in the bud by the freeze on the number of wine store licences.

Rob Stassen, real estate manager with A&P Properties, says supermarket chains welcome wine stores because they enhance the chain’s image and pay rent for the space they use.

Another hurdle faced by wine retailers, but gradually being overcome, is that, until Ontario legalized Sunday shopping last year, wine stores were prohibited from opening Sundays.

Even with Sunday shopping now legal, wine retailers must still obtain permission from local municipalities before opening for business.

It was only last month, after a lobbying effort by the Wine Council of Ontario, that the first municipality granted such permission, but the prospects look good that most municipalities will soon follow suit.

According to the wine council, of the 71 municipalities approached so far, 51 have agreed to the openings, 14 have yet to respond and only six have said no.

Selling product through their own retail outlets has not hurt sales of Ontario wines through l.c.b.o. stores.

The current top 10 list of red wines in sales includes Bright’s Entre Lacs at No. 9, and Cartier L’Ambience as No. 10.

The province’s wines also hold four of the 10 spots in the white-wine category: Entre Lacs is sixth; Hochtaler from Andres Wines is No. 7; L’Ambience is eighth; and Andres’ Domaine D’Or is tenth.

Marketing initiatives by the Wine Council are part of the reason for the growing acceptance of Ontario wines.

Last month, the council, which has limited past advertising to magazines and in-store promotions, launched its first television campaign.

Thirty-second spots run to the end of the month using the theme ‘Ontario Wines. Outstanding. On Your Doorstep.’

Watt Burt of Montreal, which has handled the council’s advertising for the past three years, is behind the campaign.