Virgin Wines boss urges trade to toughen up
The chief executive of Virgin Wines has urged the wine trade to stop moaning about tough exchange rates and work harder to maintain profits.
He has grown frustrated by seeing so much news about prices having to rise after the referendum vote weakened the pound, and said it could be detrimental to consumers and to staff.
He told OLN: “We have 150 people in our business who don’t want to hear that times are tough and selling wine is going to become more difficult. They want to find ways to stay profitable.
“I won’t underestimate the effect exchange rates have on our pricing, but it’s only one aspect of how we run our business. This is the best time ever for us to be in business. We have this wonderful product essential to the fun and social part of people’s lives. It’s rich, engaging and people love it. We have the technology to personalise and segment our customer base and be truly relevant to them.
“We have all that ability, all these massive technological advancements in winemaking, shipping, packaging and bottle design. There’s so much good stuff for us to talk about in our industry, so it’s annoying that the agenda is being dominated by exchange rates. It comes across all doom and gloom and our industry is not doom and gloom. Consumers expect good industries to be able to adapt.”
Wright believes it is important to reassure consumers and ensure the wine trade has a healthy long-term future rather than trying to squeeze everyone to chase profits in the short term.
“We keep talking about prices having to go up,” he said. “It may well be that pricing is going to become more difficult, but we have to adapt. This is not the first time exchange rates have been low. It’s only a couple of years since it was €1.05 to the pound. It has become an easy way to talk about putting prices up without working a bit harder.
“Any sensible business has a hedging policy in place. In the short to medium term everyone should be covered. After that you look at other areas. You maybe hope you can get some extra business from your database, or convert and recruit more customers, there’s all sorts of different things you can do to maintain your profitability when something that affects your profitability goes against you. Our job is to counter those things.”
Wright added: “We are not changing trading conditions with our winemakers. It’s paramount they get what they are used to. We are looking at becoming more efficient in other areas of our business. That’s what any business that goes through blips in the market needs to do. There will be a number of businesses out there that try to make the winemaker take the margin hit rather than themselves. That’s not how we operate. That’s not ethical. They are all part of our family.”