Asian mar­kets cru­cial for vi­a­bil­ity of Aus­tralian pro­duc­ers

The Weekend Australian - Travel - - Indulgence - James Halliday

IFIRST broached the pro­pos­als for far-reach­ing changes to Euro­pean Union viti­cul­tural pol­icy to­wards the end of last year. One of the core propo­si­tions put on the ta­ble by then newly ap­pointed EU agri­cul­ture com­mis­sioner Mar­i­ann Fis­cher Boel was that 400,000ha of vines should be re­moved, with ar­eas such as the En­tre-deux-Mers re­gion of Bordeaux and var­i­ous parts of south­ern France ob­vi­ous tar­gets.

Pre­dictably, the scheme met fu­ri­ous op­po­si­tion from grape grow­ers, who ar­gued there was no over­sup­ply of grapes, sim­ply a lack of de­mand.

Equally pre­dictably, French grow­ers were the most mil­i­tant, al­though Spain is the largest pro­ducer of wine fit only for dis­til­la­tion.

Find­ing a so­lu­tion is com­pli­cated by the huge frag­men­ta­tion of the in­dus­try and hence the lack of cred­i­ble spokes­peo­ple. More­over, any mean­ing­ful changes will cause sub­stan­tial short-term pain. Such is the rock; the hard place is that the longer the dam blocks the ever-grow­ing lake, the more cat­a­strophic will be the con­se­quences when (as is in­evitable) the dam wall ul­ti­mately breaks.

The so­lu­tion, if it can be called that, is to sep­a­rate the grape-grow­ing side of the in­dus­try from the wine­mak­ing side and to sub­sidise the grow­ers on a per-hectare ba­sis, as is done for many agribusi­nesses across the EU. The winer­ies would be left to fend for them­selves, ex­cept for one large twist to the tale.

In­stead of pro­vid­ing funds for the re­moval of 400,000ha, only half would go and the half of the funds lib­er­ated would be spent on a mar­ket­ing blitz in the US, Canada and Asia, but not in the EU. The irony is that the French and Span­ish gov­ern­ments are suc­cess­fully striv­ing to re­duce the con­sump­tion of wine in their coun­tries, while spend­ing bil­lions of euros sup­port­ing those who make it.

All this sends a big warn­ing sig­nal to Aus­tralia. Most ob­vi­ously, France is go­ing to at­tack our most im­por­tant mar­kets with gusto and, in the medium term, with bet­ter wines. But there is also an in­ter­sec­tion with Aus­tralia’s re­cently re­leased New Di­rec­tions strat­egy, which calls for far greater em­pha­sis to be placed on our higher-priced re­gional wines (higher than Yel­low­tail, Wolf Blass Red La­bel and so on).

The world’s lead­ing spe­cial­ist in food and agribusi­ness bank­ing is Dutch-based Rabobank, and one of its key ad­vis­ers is Arend Hei­jbroek, who re­cently made (an­other) two-week visit to Aus­tralia for dis­cus­sions and con­sul­ta­tions.

Says Hei­jbroek: ‘‘( New Di­rec­tions) is a very well re­searched, thought-out and pre­sented strat­egy, un­doubt­edly cor­rect for Aus­tralia. The chal­lenge will come in trans­lat­ing words into deeds. The prob­lem is that ev­ery other ma­jor ex­port­ing coun­try has the same aim: to trade up and se­cure bet­ter mar­gins.’’

He points to con­sumer re­search show­ing that the only Aus­tralian re­gion to have recog­ni­tion in the US is the Barossa Val­ley. Not that we are alone in this. In that soul and money-de­stroy­ing mar­ket, Bri­tain, re­search quoted in Of­fLi­cenceNews on Au­gust 24 shows that only 66 per cent of reg­u­lar wine drinkers knew Cotes du Rhone wines were from France and only 29 per cent linked Chateauneuf-du-Pape with the Rhone Val­ley.

South Africa, says Hei­jbroek, has the same prob­lems as Aus­tralia: a strong cur­rency mil­i­tat­ing against ex­ports, and in­suf­fi­cient do­mes­tic mar­ket to take up the slack. Chile, on the other hand, is a con­sis­tent sup­plier of mid-range wines and has un­lim­ited high­qual­ity wa­ter. Conch y Toro, the coun­try’s largest wine­maker, is build­ing large-vol­ume, strongly branded prod­ucts. Ar­gentina, hav­ing re­cov­ered from its cur­rency col­lapse, is rapidly in­creas­ing its ex­ports at half the price of Aus­tralia’s. In this crowded pool, is Asia the an­swer? ‘‘ Up to a year ago, the Chi­nese mar­ket was very op­por­tunis­tic but there are now se­ri­ous traders in the mar­ket for the long term,’’ says Hei­jbroek. ‘‘ But Ja­pan, China and In­dia are all very brand con­scious, with an in-built bias in favour of France. The key in all three coun­tries is the emer­gence of pro­fes­sional women and wealthy wives: they pre­fer the el­e­gant al­ter­na­tive of wine as op­posed to the mas­cu­line con­sump­tion of beer and spir­its.’’

China and Ja­pan are two of Aus­tralia’s most im­por­tant trade part­ners. We have to lever­age that ad­van­tage to in­clude wine in the mix.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.