Lights Shine On Oz Horizon
If it can find some smarts that it hasn’t shown in thirty years of ga-ga boom at the wrong end of the market, the Australian wine business may just fluke a recovery from its consequent collapse: there are lights on the horizon, and they’re not all in China.
But they do require a gastronomic and business intelligence that nearly all our winos have not yet shown, and which appear to be of a level our blessed winemaking schools are almost incapable of teaching. In short, we’re talking about quality way beyond the mindless boomtown mush we got used to sucking out of the impoverished Mallee, using up to 1200 litres of water we didn’t have to produce a litre of booze three times the alcoholic strength of your average beer which we then shipped to Britain and the USA, or Coles and Woolworths, and sold for the price of bottled water.
It’s sick to contemplate the percentage of the national grapeyard which was developed to produce this alleyjuice which is currently submerged in your actual water. Those bubbles coming up are the complaints from poor tortured irrigators who think their allocations should never be cut and that government and greenies are responsible for the floods and that everybody upstream is worse unless you’re upstream, in which case everyone downstream is worse, and anyway that’s not a flood, that’s normal.
Drought is normal.
In its masochistic and utterly predictable string of confrontations up and down the rivers, it seems nobody at the Murray Darling Basin Authority has yet discovered that the formula, 1000litres (+ or – 20%) H20 + grape sugar, poison sprays, diesel, steel, yeast, sulphur, blood, sweat and tears cannot possibly be a business plan if the water’s not usually there and you sell the result for the cost of a litre or two of packaged water. If you include the health and injury costs ($18 billion? – it’s hard to get a figure) incurred by those who partake of the product, the whole thing becomes even more ludicrous. If you include the enormous costs of rehabilitating, re-organising, and relocating the communities of hapless buggers who got suckered into providing this mindless ethanol monster -- which depends entirely upon over-supply of grapes -- you have a seriously big mess that nobody dares mention. Not even during this time of intense government-sanctioned, taxpayer-funded navel-gazing.
The last one to mention any of this, it seems, will be Di Davidson, the wine industry representative on the Authority, who has made a business of establishing irrigated vineyards along the rivers for 35 years.
There has never been more reason for serious premium winemakers to divorce themselves from this wreck. The big squirters still show every sign of getting their way in this camp staged illusion, veiled as it is in a very flimsy film of science and economics.
David Dearie, the boss of Treasury Wine Estates, has shown signs of understanding some of this, exemplified in his pleas that Australia should treat China with respect and concentrate on selling them top quality wines at a fair profit. So far, too much of what’s gone to China is stuff that Australia simply would not, or cannot drink.
Within a few years, I’m sure we’ll be buying our goonbag plonk from China. It might be better quality. China is not stupid. And it already grows more grapes than Australia.
So far, China has not purchased a fair dinkum premium Australian winery. The first ones to move in are flounders: bottom feeders. Even in confounding, impenetrable China, bogan speculators bowl in first.
But the glimmers of hope I mention are not in China. Beijing forecasts a slowing of growth there, dropping to an estimated 7.5% this year, from the 10% enjoyed over the preceding decade. Over Christmas, China suddenly ceased paying record prices for bottled Bordeaux, for example. Having realized it was them alone pushing the prices up, they are now buying Bordeaux chateaux (with vineyards) instead, and are beginning to buy into premium slices of the Burgundy vignoble. The profit will now be theirs. They will learn how much it costs to produce.
So while China goes up and down, and wishfully settles, the United States economy appears to be cruising upwards at the wealthy extreme. In its March Wealth report, the Luxury Institute, a New York luxury brands thinktank and research outfit, reports a February increase of 6.4% in sales in 18 national retail chains specializing in expensive stuff.
Forgive, please, my translations, but Nordstrom’s flagship stores boasted an 11.9% February sales growth over the same month last year, while its discount “off-price rack store” sales grew only 5.9%. Nordstrom shares have increased 600% in price since its nadir three years ago.
Rival chain Saks reports a 650% share price increase since March 2009 over a more modest, but impressive 6.6% increase in sales in stores that have been open at least a year; Neiman-Marcus, which now reports only quarterly, says in the quarter to the end of January, sales jumped by 9%.
The Luxury Institute forecasts a similar surge in European confidence, since the, er, Greek matter seems to have been avoided.
While the Institute’s figures do not include luxury wine, they have for some years proven to be a reliable advance guide to possibilities in that market.
The Stateside light is brighter for premium Australian wineries when one digests the increasing American thirst for wine. In the twelvemonth to the end of February, Americans bought 7% more wine than in the previous period. While Yellowtail was still the biggest-selling imported brand under $10 in the USA last year, the critical end of the market is hungering for better wine, and spending more per bottle. It’s this knowledge that has the Casella family, the owners of Yellowtail, buying big commercial vineyards in regions more respected than the irrigated Riverlands and 'raysias. Good luck with Padthaway, dudes.
The USA, meanwhile, is facing a premium winegrape shortage. Top-flight vineyards cannot suddenly appear and meet this thirst. This is why we see respected USA wine firms like the Jackson Family ready to invest very large sums of money buying jewels like the Hickinbotham Vineyard at Clarendon. They have a much more realistic understanding of Australia’s capacity for fine wine profit than most of the Ocker roundeyes who, so far, have still to master their chopstick action and only stand blinking, bewildered and naive, at the great Dragon to our north.
Which brings me back to David Dearie, and his pleas that we show China huge respect and treat it with more business and gastronomic intelligence than we have shown the USA and the Old World. China has been Earth’s preeminent mercantile nation for 6,000 years. And it’s not bad at gastronomy, either. China, I repeat, is not stupid.
Which means we’re gonna have to learn to make much better wine. Which means we can no longer depend upon the old wine industry regimes which have singularly failed to do so.
There’s one glittering exception. It’s fascinating that Penfolds, the most respected and profitable part of Dearie’s shiny new empire, knows how to do this, as best manifest by its chief winemaker, Peter Gago, winning the Masters of Wine Winemakers’ Winemaker award a fortnight ago in Dusseldorf.
I didn’t see any Casellas on that podium. Nobody from the irrigated inland, for that matter. No lawyers or doctors or tax-avoiding accountants. Not a soul from Family First Wineries. No Sands Brothers. Not even Wild Oats, and he’s got Larry Cherubino working for him.
On the other hand, Radio National’s Bush Telegraph last week ran an excellent show which convinced me there are new Gagos coming through the murk. This discussion about the future of Australian wine, not quite measured in its optimisim, contained some satisfying rays of hope. They were some bright young brains around that table. And they’re not all newbies. When asked whether she expected to be still in the industry in ten years time, Corrina Wright, of Oliver’s Taranga chirped
"I think I’ll definitely still be in the industry. My family’s been on the same property for 170 years. I’d be in big trouble if I left ... I think of it in terms of having really vibrant regional farming areas. Communities that are contributing both to their regions and to the economic well-being of Australia."
Corrina knows. She recalls tasting far too much Yellowtail when she annually made 18 million litres of Lindemans irrigated something for export, somewhere up the River. The Lindemans wine had to match Yellowtail. Now she’s back on the family block in the Vales, making exquisite wine in manageable volumes using commonsense green technologies. If she doesn’t use it all herself, the Shiraz her Dad grows sometimes makes Grange.
That’s the future.
To hear the Bush Telegraph's Barossa follow-up to the abovementioned program, click here and scroll to the menu for Friday 23rd March.