Tag Archives: Constellation Brands

Victim of success – Australian wine exports

If floods, bush fires, drought, over production and collapsing international demand for wine was not enough to deal with, respected Master of Wine and wine journalist Jancis Robinson (www.jancisrobinson.com) forecasts the next storm on the horizon for the Australian industry.  The large producers (Constellation Brands, Fosters and the makers of Yellow Tail wines) have slashed prices in the hard fight for market share in the important US and UK markets and as a result damaged the reputation of good value Aussie wine.

Jancis’ revelation is no wake up call for the Australian Wine and Brandy Corporation (AWBC), they have been working hard counter acting the disasterous price cutting Hardy’s implemented several years ago in the UK and Yellow Tail’s drive to the bottom of the US market.  Winemakers visiting Sweden have for several years been warning of the dangers of commoditising wine and selling wholly based upon price.

Large French wine producers must be laughing at their antipodean rivals as they suffer from their own success/excess – which just half a decade ago saw Australian wines replace France as the best selling wines in the UK. Lessons could easily have been learned from the cause of the European wine lakes!

The reason wine excites the interest of many millions of people around the world is because it is not Coca Cola. There is no secret formula hidden in a bank vault. The secret to making a good wine is the combination of factors that the French call terroir and I call the combination of the natural environment, weather and viticulturalist and winemaker’s skills.  I have been to wineries where there are more laboratory workers blending wines to exact colour, acidity and sugar specifictions than winemakers tasting and blending the wine. Naturally we don’t buy from these producers!

Australia has been successful in combining modern scientific winemaking skills to the high quality grapes many regions can produce with the result being wines of character and personality that taste Australian. Quality wine takes time to produce, costs money for the grapes, oak barrels and modern hygienic winery equipment and can not be sold for $2. If wine costs as much, or less than a bottle of Coke then these producers should not be surprised at the lack of brand loyalty their products engender.

Fortunately the large companies who drove Australia’s reputation into the dredges are suffering more than many of the quality smaller producers who have created strong relationships with wine importers around the world who know how to foster, no pun intended, a quality brand.

As a marketing guru once said to me, if you only sell on price, there is only one way to go and it is always a race to the bottom. Quality wine should be good value, great quality, interesting and create a memorable drinking experience. As the Mastercard people say, this is priceless!

Cheers for Easter, enjoy the sun, Sauvignon Blanc and grilling!