Thursday, August 27, 2009

Feeling low, down under

A piece that appeared in Meininger's Wine Business International

Once upon a time a little bird with a broken wing became lost in the frozen tundra of Siberia. Cold and hungry, he was close to death. Just then an old peasant came along, took pity on the bird and gave him a few crusts of his bread. But how could he warm up the shivering little creature? He looked around and noticed a steaming yak pat that had just been deposited by one of his herd. After a moment’s hesitation, he picked up the bird and inserted it gently into the pat. The smell was fairly unpleasant of course but, quite soon, the poor creature stopped shivering, began to feel considerably better and fell asleep. Having accomplished this small act of charity, the peasant went on his way, the yak pat began to cool down and as it did so, it became increasingly solid. When the bird woke up, it found that it was trapped and began to call for help. Soon, a fox happened by and heard the frantic cheeps. Almost immediately the fox picked up the yak pat with his mouth and gently tapped it against a rock until it broke and allowed the bird to break free from its prison. Thank you, thank you, thank you said the bird, to which the fox replied "my pleasure" and promptly popped the little creature in his mouth and swallowed it whole. And the moral of the story is: when you’re up to your neck in dung, it isn’t always your enemies who put you there. And it isn’t always your friends you get you out.

This little story sprang to mind when I began to think about the state of the Australian wine industry and its history over the last 25 years. Back in 1985, when I first visited Australia, its wine exports were almost insignificant. In those dim distant days, British wine drinkers were used to a diet of illustrious French classics – if they could afford them – and Liebfraumilch, Muscadet, , Rioja, Chianti, Bulgarian Cabernet Sauvignon and Hungarian Bulls Blood if they couldn’t. Californian wine was a new arrival on the scene and, then as today, seemed, when viewed on the eastern banks of the Atlantic, to be a musician with a very limited repertoire. There was bargain basement wine in Paul Masson carafes and ultra-ambitious Napa efforts modelled on the best of Burgundy and Bordeaux – in style, quality and price. And not a lot in between. The international head of sales at Mondavi famously never left home without a bottle of Lafite to set against his winery’s Reserve in the smartest possible restaurant. He and his fellow Californians must have imagined that a nation whose wine drinking classes were brought up on Bordelais formality would embrace their own west coast version. But, as they gradually discovered, they could not have got it more wrong.

The British wine buyers, critics and adventurous wine drinkers of the late 1980s and the 1990s sought something very different. What they – or perhaps for the sake of honesty, I should say we - admitted to looking for was unpretentiousness, and wines that combined deliciousness with affordability. We really did not care if the Australian wines did not taste like Bordeaux or Burgundy. Indeed we revelled in their difference. And we positively loved the fact that the winemakers were blokes we could go to the pub with and drink beer and discuss cricket and rugby – subjects on which most Americans have little to offer.

The honeymoon between the Australian producers and the British market lasted for the better part of 20 years during which the Australians saw their slice of the market grow ever larger until it overtook even the previously unassailable champions, the French. But outsiders might have noticed a dangerously incompatible note. Even Australian wine drinkers with moderate incomes aspire to occasional indulgences in the priciest jewels of their country’s vineyards. Well-heeled Brits, by contrast, can never quite keep their eyes off the price tag. When Australian winemakers arrived proudly bearing bottles from the cool climate vineyards they had been encouraged to develop by UK critics, they were politely received – and told that their wines were, like those Napa reds, simply too expensive. Worse still, we proved to be fickle in our affections: we were just as happy to drink a Shiraz from Chile or South Africa. For a while, like a wife wearing ever-more revealing clothes in a desperate attempt to keep her husband’s interest, the Australians indulged in an orgy of discounting before coming to the inevitable conclusion that We-Really-Can’t-Go-On-Like-This.

But what’s the alternative? The obvious answer is the US, still the most profitable major wine market on earth. The trouble is that few Australian winemakers ever learned how to play by American rules. They hadn’t modelled their wineries or their marketing on Medoc and Pomerol chateaux. They never established a globally-acknowledged super-premium category like Italy’s raft of $100+ Barolos and Super-Tuscans and Spain’s Priorats, all of which readily found USbuyers before the crunch. There’s no Australian equivalent of the Napa Valley Auction at which Versace-clad bidders buy bottles for thousands of dollars, and the only Barossa counterparts of Napa efforts like Harlan Estate and Screaming Eagle are wines that were made specifically for the US market. And treated with derision for their pretentiousness by Australian and British critics. Most observers of the US wine scene now acknowledge that Australia occupies much the same role there as it does in the UK: as supplier of large amounts of reliable moderately priced wine. Stuff you might drink with a pizza on a Wednesday evening, but not if you want to make any kind of impression. The American fox may not be precisely devouring the little bird, but it’s not doing it much good. And who should we blame for its fate? The fox, the bird, or the well-meaning British peasant ..?


  1. An interesting read Robert, however as a producer in the Barossa Valley and speaking only from our perspective not on behalf of the other 2,500 Australian wineries, the American fox is definitely not the most obvious solution to our myriad problems.
    The US has the biggest potential without doubt due to its sheer size and maturity, but that does not make it any easier a market to crack.
    I believe we will see a shift in focus away from Australia's traditional strongholds - the UK and US - as Australian winemakers embrace Asia as a whole and China in particular. The big three (Constellation, Foster's and Pernod Ricard) do not dominate these markets as they do elsewhere and the playing field appears to be level for all regardless of size.
    Small to medium-sized firms are capable of generating profitable sales in the tens or hundreds of thousands of cases - volumes that don't really excite the big guys but keep the rest of us in business.
    I also believe that markets such as Austria, Belgium, Germany, Holland, Scandinavia and Switzerland, markets where we are already represented, will continue to offer us further opportunities.
    Australia has enough high quality, good value, regionally distinct wines, which admittedly the average consumer knows little of yet, to be able to rekindle their interest in Australian wine.
    I do not believe our cool climate, regionally distinct wines, are too expensive, it is more that the UK's bargain-obsessed and deal junkie consumers (Australia's fault for creating them) are not prepared to pay for them.
    The shift will come as other markets prove more receptive to the "new" generation of Australian wines. It's time we, as Australian winemakers, hit the road again, and engaged customers outside the UK and US.
    Matt McCulloch,
    General Manager, Ch√Ęteau Tanunda

  2. I agree 100% Matt. I wasn't saying that the US was the answer - merely illustrating why Australians have had a hard time there. Australia's best cooler climate wines are not overpriced - in anyone's eyes apart from cheapskate UK buyers. Which was precisely my point. Some Australians are now doing well in Holland, a country whose consumers were once thought of as among the least ready to spend money...