On occasion, I have been known to hum a ditty by Bertolt Brecht and Hans Eisler called Supply and Demand*. Acharacter, just known as ‘the businessman’, sings about rice and how he can maximise the return on his investment. The chorus goes:“What is rice, actually?
Do I know, do you know
what’s this thing called rice?
God only knows what rice is,
I only know its price.”As a critique of capitalism it’s as neat as they come. I hadn’t thought of it in a long time, but a recent press release brought it to mind. It came from Netto and trumpeted the discount retailer’s first ever blended whisky, McCauley’s. Then came the shock. It was to retail at £6.86. Now, you’re hardly going to pay premium prices in a Netto store, but this one shocked me.There’s a number of issues arising from this.The quality of the whisky itself. I obtained a bottle which states proudly that it is three years old. You won’t be surprised to hear that it tastes like it as well. Immature, slightly bitter with a finish which can only be called abrasive.You can picture the smoke from the just extinguished candles on its third birthday cake still floating in the air as the components are quickly disgorged and bottled. But McCauley’s couldn’t have been four years old. If it had been it would have missed Netto’s price point, which brings me to my next one.How can you sell whisky for £6.86 in the United Kingdom and expect to make any profit? Consider this.The tax alone amounts to £6.49. That leaves 37p to cover the cost of liquid, packaging and transport. Making a profit? Impossible. Breaking even isn’t even within the realms of possibility. Neither will Netto be taking the hit. Retailers don’t operate like that – the supplier, whoever it may be, is the one picking up the tab.The question is, why do it? Is the supplier simply desperate for cash? Has it a surplus of young whisky? Unlikely. That firm entered into the agreement willingly, saw it is a business opportunity. All it has done is reduced whisky to the status of a commodity.McCauley’s may be an extreme example, but virtually every whisky supplier plays some variation on this price game. By doing so, they reduce the money which should be used to promote their brands. How can we expect consumers to take blends seriously as a quality product when the category has been reduced to commodity status? The supermarkets’ bullying tactics may have paid off, but only because distillers have been willing to play along.Neither is this restricted to discount retailers and bogstandard blends. In the UK last Christmas there were litres of single malt selling for less than a standard blend, something which, should it continue, may affect even malt connoisseurs.The malt category may be small, but it is profitable and has grown because it is based on the concept of ‘premium’.Destroy that premise and malt’s foundations collapse. As soon as price-cutting becomes endemic then profits are cut, choice its reduced and quality is compromised. How can you claim to be a premium brand if the only way you have of differentiating your brand from its rivals is to say “I’m cheaper than you are!”There is a positive feeling about whisky at the moment. The pendulum appears to be swinging back to brown spirits, but the industry will only entice new drinkers if it gives them quality products, not commodities.As the song progresses the businessman’s argument is extended to its logical conclusion: that he doesn’t know what a man is either, just his price which, given the attitude to staff taken by various firms in recent months, is something which maybe we can discuss next issue.* If you’re interested the song is from The Measures Taken. Try the version by Eric Bentley on his Songs of Eisler.