A good year

Aus­tralian wine is boom­ing – and we can all drink to that

The Weekend Australian - Magazine - - 2017 JAMES HALLIDAY’S TOP 1OO - Pho­tog­ra­phy Nick Cub­bin By James Halliday

aus­tralian wine is in a good place, whether you are a grape­grower, a wine­maker, a re­tailer, a som­me­lier or, most im­por­tantly, a consumer. The value of the na­tional crush of 1.93 mil­lion tonnes is $1.22 bil­lion, the av­er­age price per tonne the high­est since 2008. Af­ter years of grape sup­ply ex­ceed­ing de­mand, the two are in bal­ance. There are two dis­tinct types of Aus­tralian wine pro­duc­tion: com­mer­cial and pre­mium/ super-pre­mium. The former is largely sold in su­per­mar­ket chains, with price dis­counts and store/floor dis­plays driv­ing sales. This year 1.32 mil­lion tonnes of grapes, over­whelm­ingly grown in the warm in­land re­gions with ir­ri­ga­tion from the Mur­ray and Mur­rumbidgee, were used for such wines at a cost of $354 per tonne. While com­mer­cial wine may be of scant in­ter­est to those read­ing these words, it is of fun­da­men­tal im­por­tance to the wine in­dus­try as a whole, and to the ma­jor­ity of reg­u­lar wine con­sumers who en­joy a glass or two a day se­cure in know­ing what they like, and dis­in­ter­ested in how and where it was made.

Pre­mium and super-pre­mium wines are made from grapes grown in the cool/ tem­per­ate re­gions. This year 0.61 mil­lion tonnes were har­vested – al­most half the com­mer­cial ton­nage – with an av­er­age value of $1232 per tonne (al­most four times greater). It is this part of the sup­ply chain that is un­der in­creas­ing pres­sure, largely due to the boom in ex­ports to China.

In 2000, China im­ported $1.2 mil­lion worth of Aus­tralian wine. As the en­su­ing quar­ters went by and the rate of growth ac­cel­er­ated, com­men­ta­tors said the rate couldn’t be sus­tained. But it has: in 2017, the av­er­age value of ex­ports was $2.02 mil­lion per day, a to­tal of $739 mil­lion, up 56 per cent on the pre­vi­ous 12 months. The year-on-year fig­ures show Australia’s share of the mar­ket in­creas­ing from 20 to 24 per cent. France’s share fell from 45 to 41 per cent.

The per­pet­ual ques­tion (with its im­plicit neg­a­tive an­swer) is: can this con­tinue? Wine In­tel­li­gence, a UK-based in­ter­na­tional mar­ket re­search com­pany, re­cently re­leased a re­port on the key trends in the Chi­nese mar­ket. It de­scribed an ex­pand­ing mar­ket with ris­ing dis­pos­able in­come and im­proved lo­gis­ti­cal dis­tri­bu­tion in lower-tier cities; in­creas­ing pur­chase of wine for per­sonal con­sump­tion by younger, open-minded con­sumers; pref­er­ence for softer, more fruity red wines with less tan­nins; de­vel­op­ing de­mand for white wine, espe­cially aro­matic styles; re­gional dif­fer­ences re­flect­ing lo­cal cui­sine; a shift to on­line pur­chas­ing en­hanced by ac­cess to wine in­for­ma­tion and lower prices; lower markups in restau­rants and ready ac­cep­tance of BYO; and in­creas­ing ac­cep­tance of screw­caps for wines at lower price points, al­though not for higher priced red wines for gift-giv­ing (it won’t take long).

I would add that in­bound Chi­nese tourism in Australia (and across-the-board in­vest­ment) is cre­at­ing un­paid Chi­nese am­bas­sadors for our wines at mind-bend­ing speed.

China is al­ready by far our largest ex­port mar­ket for pre­mium and super-pre­mium wines and will in­evitably pull do­mes­tic prices higher. The sil­ver lin­ing is that for the av­er­age Aus­tralian win­ery there will be more in­come to plough back into the busi­ness, lift­ing the quality of its wines – and for the own­ers to draw a salary and take a hol­i­day. For con­sumers there will be bet­ter quality wine at ev­ery price point, since quality and price in­crease in lock­step.

In ad­di­tion, the year saw the long-awaited clo­sure of loop­holes in the wine equal­i­sa­tion

tax. The govern­ment ex­pects to save $300 mil­lion over the next four years. In re­turn, it has pro­vided $50 mil­lion to be ad­min­is­tered by Wine Australia in­clud­ing $32.5 mil­lion of mar­ket­ing sup­port, chiefly in the US and Chi­nese mar­kets. Another $10 mil­lion will be spent on state and re­gional wine tourism ini­tia­tives in Australia.

And so to this year’s Top 100. As a func­tion of price (and hence value for money), the un­der $20 white wines were pre­dom­i­nantly fer­mented in stain­less steel and early bot­tled, thus reach­ing the mar­ket and pay­back for the in­vest­ment more rapidly than chardon­nay. Mar­garet River pressed home its ad­van­tage in the sau­vi­gnon blanc and semil­lon blends, leav­ing only the scraps to fight over.

The pat­tern with whites over $20 was very dif­fer­ent, with one ex­cep­tion: ries­ling was well rep­re­sented in the un­der $20 bracket with four wines, and in­creased that to five wines in the over $20 bracket. On this com­par­i­son alone the long talked-about ries­ling re­nais­sance might be given cred­i­bil­ity, re­dou­bled by the av­er­age price per tonne of ries­ling, the high­est of all white va­ri­eties. China, pre­vi­ously obliv­i­ous to the won­der­ful com­pat­i­bil­ity be­tween ries­ling and most Chi­nese cui­sine, is show­ing dis­tinct signs of in­ter­est. None of the new va­ri­eties did well enough to at­tract a win­ning score, but fi­ano is my tip for the first to do so at long odds.

Mov­ing to red wines, pinot noir re­flected the strong po­si­tion it has across all routes to mar­ket. The four pinots un­der $25 pretty well cleaned out the larder at this level, but there were many more wines over $25 that might equally have been se­lected. As ever, the great­est com­pe­ti­tion oc­curred in the over $25 group. At one end came the pinots and two beau­ti­ful and sim­i­larly per­fumed grenaches, leav­ing shi­raz and caber­net sau­vi­gnon/caber­net blends to con­test brag­ging rights. The abil­ity of shi­raz to pro­duce won­der­ful wines in ev­ery com­bi­na­tion of soil and tem­per­a­ture would make it eas­ily ca­pa­ble of pro­vid­ing all 80 ta­ble wines in the Top 100. Caber­net sau­vi­gnon is more choosy: Mar­garet River and the Yarra Val­ley pro­vided a glo­ri­ous line-up, headed by the 99-point Mount Mary Quin­tet.

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