Kroger’s Plan would Change How Wine and Beer are Marketed

Published Date : Apr 18, 2016

Kroger Co., one of the largest grocery stores chain across the U.S., is focussing on the common consumer habit of impulsive buying to market beer and wine. The company has recently proposed Southern Wine & Spirits, a private distributor, to oversee the shelf space shared by alcohol brands across the aisles of its stores. Presently, this task is assigned to representatives from the various beer and wine manufacturers. These representatives analyze the sales and popularity of the alcohol brands to decide their locations on store shelves. Kroger’s proposal would outsource this important task to a third party, Southern Wine & Spirits, which in turn, would ask the alcohol brands to cough up a voluntary fee for the service. Both Kroger and Southern Wine have not commented regarding this matter.

Proposed System Might Hurt Small Scale Wine and Beer Manufacturers 

According to Kroger, this plan is expected to be beneficial to regional wineries and smaller brewers as it would reflect the tastes of customers. Currently, the grocer makes display changes twice a year that are not consistent across all of its stores. The new plan would let stores to update displays more regularly. However, this new system has been questioned by both small and large wine, liquor, and beer industry groups. The Brewers Association that represents the craft brewers across the United States has joined various other alcohol trade associations to question the legality of Kroger’s proposed system. These associations have drafted a letter to the U.S. treasury secretary to ask whether the new system violates government rules. Paul Gatza, the director of the Brewers Association has pointed out that this system would hurt the small-scale craft brewers who would not be able to pay higher fees to afford premium locations on store shelves.