Where’s the beef?

Being an Australian wine traveller gets you in a lot of doors around the world. For one thing Australians have been loved as travellers a long time as they tend to be open-minded, fun, aware and generally up for a good time. I’m concerned that this positive image is starting to lose its sheen but that’s another topic. As one of the world’s major producers and the largest exporter outside of Europe you would struggle to find anyone in the global wine industry that isn’t aware that Australia makes wine.

In fact most are aware of the meteoric rise of Australian wine in the ’90s in Europe and North America thanks to the strong marketing and communications of varietal labelling. Not to mention the major strides made in large-scale commercial production reducing costs whilst making clean fruit-driven wines. Australia became the number one country imported into the United Kingdom and in many cases second only to Italy or France. It’s brands seemed indestructible.

Wine Australia uses its most familiar symbol

Wine Australia uses its most familiar symbol

Undoubtedly with a certain amount of glee the rest of the world has watched Australian wine fall from grace over the past five or more years. Numerous experts both within Australia and without have looked at figures and attempted to explain this incredible reversal of fortune. Having made some of the most important advances along with the United States in the ’70s and ’80s, Australia has seen other wine-producing countries in South America, Europe and Africa beat them at their own game in terms of value/quality and cost.

The major cost prohibition for wine production in Australia is wages, in some cases representing up to half of the total. With high labour costs and no access to a large inexpensive migrant labour source Australia relies on its machinery to handle the majority of it’s harvesting. How can Australia compete with South America, Mexico, Eastern Europe and Africa when thousands of people are happy to work for a fraction of what people need to earn to survive in the ‘lucky’ country.

The response from Wine Australia and other pundits has been to shift the focus of promotion towards more premium categories, highlighting the exceptional quality of Australian wine. This is unreservedly a strategy I endorse as we simply can’t compete with rapidly growing producers like Chile and Spain. The glut experienced in Australia in the last ten years has abated in part but not been helped by the global down-turn in sales of Australian wine.

Much of the blame for the fall has to go to the Global Financial Crisis which is still being felt, particularly in Europe. With Australia continuing to trade strongly with Asia (aka China) the high value of its currency also impacts on the value of Australian wine versus our South American competitors. Volume clearly is not the answer considering that the Mendoza region alone produces 30% more wine than all of Australia. Quality is the answer.

Here-in lies the problem; how do you convince the world of Australia’s great wine. Many people have heard of great Australian wine but they simply can’t get access to it. Ever since Robert Parker awarded Penfold’s Grange with 100 points the wine world has been aware of it’s greatest export; shiraz. There are two major problems with this phenomenon however.

The first is the belief that Australia is a one-trick pony, only producing full-bodied, often heavily oaked, high-alcohol wines from warm climates. With shiraz having everything but the kitchen sink thrown at it what of subtlety and elegance? Are consumers simply paying for winemaking? Why pay $500+ for a bottle of massive dark and bomby red wine when you can get an exceptional bottle of Burgundy, Bordeaux, Barolo or Brunello (funny how most of the great wines start with B…)?

This of course isn’t to suggest that Australia has the authority on these types of wine, but you could argue they are partly responsible for making them so popular. On my trip I discovered my fair share of fruit and/or oak bomb wines from a myriad of other warm-hot climate regions in the old and new world. Yet all of these other countries I visited are also famous for their more restrained cool-climate wines as well.

So why not Australia? An argument could be made that it is partly the fault of the way Australia is promoted as a tourism destination, all beaches or outback bathed in sunshine and not a mountain in sight? It blew peoples minds when I told them that you can ski in Australia! I always find it amazing that there seems to be a perception that Australia is a totally homogeneous climate/landscape in spite of the fact that it is roughly the size of Europe.

The main reason for the perception is that the six largest wine companies produce about 80% of the wine in Australia, and the majority of this is from warm-hot regions at the lower ends of the quality ladder. As these six companies are responsible for almost all the wine exported from Australia they have the weight behind them to promote Australian wine to meet their ends, and to dictate to governing bodies in the same way as they are of course the largest levy-paying members. It’s hard to compete with that, but ultimately it damages the general opinion of Australian wine and demeans their communication of premium wine.

Australian wine consumers in my opinion are some of the most sophisticated in the world, thanks largely to the success of the domestic wine industry. Over the past 30 years the population has been made aware of different grape varieties, different wine styles and how different climates can influence both. There is now no question about the quality of the wine production in Australia, it is more about finding the right style for the right place, which in essence is what terroir is all about. Having travelled I am of the opinion that Australia is leading the new world in terms of understanding what it has whilst at the same time doing the most experimentation with different techniques and different grape varieties.

Thus we are left with the problem that there is amazing wine being produced in Australia, better than ever, and more importantly a myriad of different styles from over 50 different regions, but the rest of the world doesn’t know about it and they are unlikely to in the near future. The basics of economics would suggest that demand creates a market, but how to communicate to the world?

It bothered me that so many people actually working in the wine industry knew so little of the developments in Australia in the last 10 years, and believed that all wine in Australia was machine-harvested, fermented in huge stainless steel vats with oak chips and tasted the same. So I want to make it my immediate mission to introduce people to wines that maybe they can’t get in their own area but should make enough noise to get it there.

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2 Comments

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2 responses to “Where’s the beef?

  1. We _love_ Australian wine because they do interesting things that not many in America do. We encountered our first sticky and sparkling red in Australia. Maybe not complex wines, but _innovative_, which I suspect is where the future lies.

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    • Australia produces both innovative and elegant complex wines. As you may already know these wines are pretty difficult to find in Australia let alone overseas (e.g. the US). We are experimenting a lot more than I perceived in North and South America, particularly with new grape varieties possibly better suited to our climate and geography. Hopefully soon we will stop focusing on wines that are simple and fruit driven for low prices, because we can’t compete with Chile, Argentina and Spain.

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