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jeudi, 06 février 2014

AUSTRALIAN WINES

IS THE AUSTRALIAN WINE INDUSTRY IN TURMOIL?


Claude Gilois

 

It is the latest statistical data provided by the Australian wine industry, and my long Australian tour in 2013 that have prompted the remarks contained in this article.  

While the Australian wine trade expected increased sales on the export markets, the results have just come through and are disappointing. The volume of sales are down by 6% while the sales revenues are up by 1%, there is no cause for complacency.

In fact, this drop is not new. It started in 2007 before the economic crisis that shook the world in 2008.

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Export of Australian wines since 1980

To use the language of economists, we could certainly conclude that there are cyclical factors that have contributed to the decline of Australian exports. In particular the economic world crisis and a high Australian dollar, fuelled by the extraordinary richness of minerals of the Australian soil, and the huge demand from China.   Beyond these cyclical factors, it would appear that there are also structural factors inherent to the wine industry and that Australia is no longer totally in tune with its main markets. What was once the greatest strength of the Australian industry has now perhaps become its Achilles’ tendon.

Some points appear to be of prime importance in this rather bleak picture. It is the extreme concentration of the Australian wine industry and its marketing power, unequal in the world, that allowed Australia to export more wine to the UK than France did in the year 2000 and proppeld  the sales to the USA from 600,000 in 1990 to 20 million  cases in 2004. The great majority of the wines exported were entry-level wines, very often highly manipulated, coming from the irrigated industrial vineyards in what is commonly known as the Murray-Darling basin.  Sustainability of viticulture is being seriously questioned in this region due to repeated drought periods experienced over the last decade (likely to recur because of climatic changes) and the high demands from users as the region produces one third of all Australian agricultural goods.

 The other major strength of the Australian wine industry lies in the ability of major conglomerates to produce iconic wines as well as entry-level wines, which in the 1990s moved the entire industry forward and in particular pushed the small producers to export. The stratospheric scores from the American wine critics would seal the success of Australia in the 1990s.

But since the middle of the 2000 decade, there has been a small but detectable change in consumers’ attitude in that they wish to consume less alcoholic, more authentic wines with less wood treatment with more drinkability. Australia when  it comes to providing wines with more drinkability  in so well placed or does not play on its strengths. Quite rightly Andreas Clark, the temporary head of Wine Australia, has voiced his concerns: ‘The decline in the export of bottled wines at the high end of the market on our main markets is worrying’. This shows that the Australian wine industry has a long way to go before the situation improves in order to guarantee the winegrowers and winemakers sustainable business conditions.'

 Big businesses are not usually the best at recognising small, but detectable changes in consumers’ habits and in studying the competition, especially when it comes from all directions in an environment that is changing faster than ever. There are multiple examples of hugely successful businesses 10 years ago that are on the brink of bankruptcy (Nokia, Ericsson, Blackberry).

The Australian industry appears to be quite happy to continue using the formulas that were so successful in the 1990s. Entry-level wines, technically very sound, if often heavily manipulated, and some fine wines, broad, high in alcohol and wood. These wines have undeniable qualities but the consumer’s palette gets easily tired after a glass or two. The Australian wine industry has not yet, as a whole, engaged in a modification of the viticulture and vinification processes that will make wines more drinkable, less heavy and less alcoholic (except by using the artificial process of alcohol removal).

Thankfully, however, there are, some exceptions that will hopefully be used as locomotives to propel the well-needed changes.  In the Margaret River, Cullen produces wines that rarely exceed 13o of alcohol, and their top cuvées of cabernet sauvignon are very reminiscent of those of Stags Leap Wine Cellar when Warren Winiarski was in charge; the famous ‘iron fist in a velvet glove’.

 In the Eden Valley, the mythical domain of Pru and Steve Henschke whose wines, which include amongst others, Hill of Grace, Mount Edelstone and Cyril Henschke, have extraordinary finesse and elegance. As long as the majority of the Australian wine industry thinks that Grange is the best Australian wine rather than the Hill of Grace then the necessary transformation of the fine wine industry will not be complete.

Torbreck is another leading character who was able to show that it is possible to make elegant wines in the very hot region of the Barossa Valley, but he was recently dismissed  of the domain that he created.

Belnaves in the Coonawarra is another domain where great attention is paid to the texture and the subtlety of wines.  Mount Langi Ghiran is achieving remarkable texture on its wine by using an increased proportion of whole bunch pressing. 

The Mc Laren Vale produces mostly wines with heavy concentration and powerfull fruit characteristics. 

The Clare Valley remains a region of heavy wines; the red wines have such powerful red fruit characteristics and heaviness in alcohol that they have become difficult to drink even for their fans.

However, Australia holds some very good trump cards with its beautiful Rieslings from the Frankland River, Clare Valley and the Eden Valley, but at the moment the large companies seem to be more concerned in producing insipid, cheap wines (that should be described as alcoholic beverages, but not wines) and fine heavy wines that the consumer is increasingly reluctant to buy.   The marvellous Semillons from the Hunter Valley (a region where making good wines should not be possible) barely reach 11o of alcohol and the best producers are able to hold them for 5 years before releasing them, but sadly the consumption of which is diminishing alarmingly.

 It appears that, contrary to what happened in the 1990s, when large concerns had the major influence on the success of Australian wines on the export markets, that it is the smaller domains which will bring the greatest contribution in putting the industry back on track. One question remains; can Australia, given the scarcity of water resources and the climatic changes, be a major player in the volume market?

 

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 Torrential rain after of decade of drought (Photo Ricardo Uztarroz)

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