Down under going backwards?

by Stuart Walton, 04/06

Everybody knows by now the greatest story ever told in modern wine. It concerned a bunch of upstarts from way down in the southern hemisphere who came stomping into the sedate and fusty world of European connoisseurship in the 1980s and rewrote the book.

Labelling wines by their grape varieties (a nobrainer when you think how few important grapes there are in the big names of French wine, erstwhile king of the jungle), and unleashing a torrent of sweet, sunny, mellifluous southern flavour on a market that had cut its teeth and scoured its gums on lean, acidic, grassy wines ever since Noah got cracking. The first wave of Australian wines cleaned up in the British market.

Not only was Australia supremely successful in shifting popular wine taste on its axis in the direction of big-hitting, super-ripe, alcoholic stunners, but it managed to do this while maintaining a higher average price point than most of its competitor countries. It wasn’t just that consumers were prepared to flee the likes of Muscadet and head for the Adelaide Hills; it was the fact that they didn’t mind paying a little more for the privilege.

As the most competitive century in viticultural history gets under way, though, I wonder whether Australia hasn’t got itself onto a cleft stick. It has allowed itself to become too heavily associated with big commercial brands at low prices. With hugely favourable exchange rates to bolster them, wine buyers for most of Britain’s supermarkets and high street multiples know that Australia can produce the reliable brands that many casual consumers demand, at low prices. For many, Australia is now synonymous with low-priced, usually deep-discounted, commodity wine.

Add to this the frankly ridiculous over-production there has been in Australia in recent years, and you have a sure-fire recipe for satisfying the pile-ithigh- sell-it-cheap approach that is the reflex sales strategy of some of the UK's biggest retailers.

The price war on the UK high street has been rapacious, with wine, inevitably, an integral part. These retailers are, after all, the most important players in the ballpark when it comes to UK wine sales.

The result of this awkward confluence of economic factors is not hard to perceive. Volume of sales is up (and comfortably ahead of the main rival, France, itself slipping into helpless disarray) but total value of sales is down. This is a direct consequence of all those shelf-end 'BOGOF' and 'three for a tenner' promotions on big name brands. Unless it is careful, Australia could be well on the way to acquiring the image of a supplier of everyday, undifferentiated, bulk-produced slosh for the undiscerning.

This, of course, would be desperately unfair and absurdly unrepresentative of the Australian wine industry’s continuing potentiality. Anybody even halfconcentrating at a tasting of the best of Barossa, Margaret River, the Clare Valley and Coonawarra will be brought up short time and again by wines of dazzling intensity and individuality.

But where are these wines in the British market? They have been forced back into the independent sector, which is doughtily doing all it can to shore up these quality producers against an engulfing tide of monotonous brand names elsewhere.

Where lies the answer to this conundrum? If they could but see it, Australian producers hold it in their hands. Giant combines, who make wines across the quality board, have always dominated the industry.

The opportunity must remain open for them to push their premium bottlings - especially where they are being marketed under different 'producer' names - to the same outlets that are selling the more mundane stuff. And by the way, when did Australia become so content to produce such volumes of mundane stuff anyway? The theory was originally that they could leave that to the big European négociants. Whatever happened to that fabled quality/price ratio, guys?

Australia needs to pull away from reckless promotional offers. The degree of support the big retailers are still getting for discounts on boring wines from those responsible for producing them is little short of a racket, and should be run down while there is still the economic flexibility to do so. At least in the area of production volumes, there is already hope of progress. With new plantings down in the last couple of years, there will be correspondingly less wine to sell in the foreseeable future.

As things stand, the picture looks ever so faintly familiar - an ocean of price-slashed mediocrity at one end of the market, and a huddle of super-premium wines sold by niche retailers at the other. Did somebody say Germany?