Aussies: down and out in the UK?

31 October, 2008

When it comes to sport, the Australians are a supremely competitive bunch. That's why the country's

humiliation on the cricket field - crushed in India by an unprecedented 320 runs at a recent Test match - will have hurt so much. It was bad enough losing out to the Poms in the Olympics this year (don't be fooled by all those snide comments about Brits being good at "sitting down sports"), but this is far, far worse. Used to dispatching opponents with disdain, Australia's cricket team is on the slide.

Is there a parallel to be drawn with the Australian wine industry? I don't want to over-emphasise the decline of Brand Australia (or of Ricky Ponting's men, who have a habit of stuffing criticism back down throats), but I believe there is. In wineries, vineyards and corporate boardrooms Down Under, the swagger of the last 20 years has all but disappeared. Australia's aura of invincibility, its supreme self-confidence, has been eroded by a number of factors and may never be the same again.

Even Australian cheerleaders

such as Jeremy Oliver, writing in these pages last month, have conceded that the wine industry is "facing fights and putting out fires on many different fronts". Too right it is. Oliver outlined nine challenges, some of which are more serious than others, but together they are potentially very damaging indeed.

He thinks that Australian wine will overcome them. "Wine and production," he wrote, "have become ingrained in this culture, and too many people have too much at stake not to work together to find the necessary solutions." I'm not so sure.

The latest Nielsen data (to the beginning of October) confirms that Australia is losing ground

here. Its market share has fallen from 22.6% to 21.7% by volume and 24.2% to 23.1% by value, down 4% and 1%, respectively. On the plus side, Australia's average bottle price has risen from £4.27 to £4.42 and its brands (Hardy's, Jacob's Creek, Wolf Blass, Lindemans and Banrock Station), still dominate the top 10. There are also, it must be said, a number of other countries that view Australia's status, even its slightly diminished status, with envy. But I still think it's got big problems, which run deeper than those outlined by

Oliver.

Australia's market share will continue to decline, in my opinion. This is partly the result of the credit crunch and the unseemly dash by supermarkets to list bargain basement wines. Australia doesn't have the volume, the weak currency

or, it must be said, the will to compete at the bottom end of the market. Its wine industry has prostituted itself in the past (and still continues to do three-for-£10 deals), but it's not prepared to lie there with its legs wide apart any longer. Little wonder the Aussies are looking to develop new markets, where they can charge a fair price for their wines.

There are more profound problems in my view. The first is the image of Australian wine, tarnished by the discounting of the last five years. Once upon a time, consumers regarded Australian wine as great value for money, even at higher prices.

A lot of them no longer do. Is the Shiraz on a BOGOF worth its full price? Or are producers bottling cheaper wine in the knowledge that most of it will sell at half price?

The second problem facing Australia is a reflection of its success. Not so long ago, Australia led the way in making fruity, approachable, fault-free wines at every price point. It wasn't unique in this respect, but it could point at many of its competitors and laugh at the unreliability of their wines, not to mention their shoddy marketing.

These days, Australia's competitors have caught up with, and even surpassed, its efforts. To take only one example, Concha y Toro is a much better brand than any of the top Aussies. More to the point, the quality of Australian wine at £4.99 and below is often disappointing and frequently dire

- a confection of oak, added acid and grape concentrate. Just try some of the wines that are on supermarket shelves at the moment.

I also believe that we are witnessing a stylistic shift in the UK, away from the kind of wines that Australia can (and frequently does) make in its sleep towards something subtler, less oaky and more refined. I know that the ongoing success of California appears to disprove my theory, but I still think this shift will benefit France, Italy, Spain, Portugal, Chile, New Zealand and Argentina in the medium-term.

Can Australia respond? Up to a point. It is certainly developing cooler climate regions and exploring less familiar grape varieties such as Arneis, Fiano, Albariño, Tempranillo, Petit Verdot, Malbec, Mourvèdre and Touriga Nacional. It is also making an effort to reduce alcohol levels and cut back on the use of oak. But will this be enough to halt the decline? As with its cricket team, you'd be unwise to write the obituary of the Australian wine industry just yet. But the signs don't look good.




Bookmark this


Site Search

COMMENT

Donald Trump: the US has much to learn from history

The reasons Donald Trump should not be left in charge of a shopping trolley, let alone the keys to the White House, are plentiful and well-documented – from his use of the word “bigly” and lamentable business legacy to his dubious post-modern feminist principles, quite astonishing lack of political acumen and, most worrying of all, his bewildering hair. 

Click for more »
Upcoming events

Polls

Is blended Scotch overshadowed by single malt in retailers?

  • Yes
  • No
  • Don't know

Facebook

Twitter