LBV port suffering from supermarket discounting

Seely, managing director of Quinta do Noval and other wine estates owned by AXA Millésimes, told decanter.com that price-slashing by the big port houses had spoilt the market for LBV.

'The long-running price war over Late Bottled Vintage (LBV) port is the biggest worry in the Douro today – since the two main producers of this category started slashing prices.

'There is lots of great LBV being made – indeed it's a paradise for port drinkers at the moment – but the price wars have made it difficult to make money from it.'

Seely was speaking at the launch of two still red wines from Quinta do Noval: Cedro do Noval and Quinta do Noval, both from the 2004 vintage.

'We have been able to stay out of the price war because our production of LBV is relatively small,' he said. 'With more quality grapes coming online at Noval following recent plantings, I would be reluctant to channel these into LBV in non-vintage years. The new red wines give us the option of using these grapes in a different way.'

Paul Symington, joint managing director of Symington's, one of the biggest port houses which produces Graham's, Dow's and Warre's, and supplies all major UK supermarkets, agreed that prices had been slashed but stressed that producers had little control over retail pricing.

'When the retailer decides to promote a wine, the producer cannot discuss the price beyond the ex-cellar price. If you sell to supermarkets you are subject to their decisions. It can be very hard to stand up to some of these guys.'

Supermarkets are able to deep-discount a port as a loss-leader – for example around Christmas to draw buyers in. It is then that you see an LBV slashed to £5.49, up to half its list price, Symington said.

He added that such discounts, if they are not done too often, do not damage the brand. 'But there is a strong wish amongst LBV companies not to see that kind of discounting,' he said.

Other senior figures in the port world are more outspoken. 'Supermarkets threaten and bully,' one well-placed source told decanter.com.

'A major multiple threatened to delist us because they had another producer lined up and we were faced with losing our second biggest UK promotion. They then said they were bluffiing.'

For its part, Quinta do Noval is a latecomer in the Douro red wine market. 'I have always believed that it should be possible to express the Douro terroir in unfortified wine,' said Seely, 'but it is only now – after eight years of experimenting with different blendings – that we feel the wines are good enough to carry the Noval name.'

Unlike some other Douro producers, Noval will not sell its wines through Bordeaux's négociant system. 'The négociants often focus on selling these wines in Portugal as they do so well there – we don't need any help with selling the wine in our own market.'