The mood at this year’s annual Australia Day tasting in London was buoyant. The event, timed to coincide with Australia’s national holiday, is a chance for the country to showcase what it’s been up to, to the all-important UK trade. It’s the biggest tasting of Australian wines held outside the country, and this year, 230 wineries poured nearly 1,100 different wines. The 2017 tasting was a little less formal than in recent years, and there were more winemakers pouring for a larger number of young sommeliers.
Notably, there were also a lot more expensive wines, ranging up to £160.00 ($200.00) a bottle. Laura Jewell MW, who was appointed the UK head of Wine Australia in 2014, says that Australia is now unashamedly shifting its focus towards more premium offerings.
The big boys
The issue for Australia’s smaller producers has been that Australia’s perception abroad is often dominated by the offerings of the big producers, such as Accolade, Treasury Wine Estates and Casella Wines. While the major companies also make some of Australia’s most prestigious wines, they are largely known for their almost unmatched ability to deliver large volumes of popular, mass-market brands; the prevalence of brands like Yellow Tail has caused Australia to be seen mainly as the home of supermarket wines. Winemakers chasing Parker Points by making high-alcohol, syrupy Shiraz didn’t help either, and nor did an unprecedented rise in the Australian dollar between 2010 and 2013 to parity with the US dollar.
But the Australian currency has returned to previous levels, smaller Australian winemakers have made more overseas visits, and – more importantly – the big companies, who provide so many of Wine Australia’s promotional dollars, are backing Wine Australia’s goal of promoting artisanal and premium wines. “A lot of the independent retailers are coming back to Australia as delivering value for money,” said Jewell. “There are just so many stories we can tell, such as our alternative varieties and old vines.”
According to Wine Australia figures, sales to mainland China are up 40% in value and 45% in volume. Sales to the US increased by 3% in value, while those to European markets like the Netherlands, Sweden and Norway are up by between 2% and 3%. The famously price-sensitive UK is still Australia’s largest market in terms of volume, not value, although Jewell says that “exports at the bottom end have declined. We are really seeing a big increase at the top end.” Overall, while Australian exports rose 7% in 2016, to A$2.2bn ($1.7bn), significantly, volume only grew by 1%.
The international media has also been increasingly positive. Following a recent trip, noted American writer Jon Bonné noticed a philosophical shift to a concentration on a sense of place, after “a 50-year reliance on building its wine industry by relying on scale and reputation rather than Old World notions like terroir.”
A food-and-wine tourism strategy rolled out by Tourism Australia at the end of 2013 has also helped. Since the campaign began, winery visits have risen by 28%, attracting an annual figure of 970,000 international tourists.
Some of these visitors apparently get a shock. An Australia Day Adelaide Hills Chardonnay masterclass demonstrated the elegance and freshness of cool-climate Australian winemaking. The wines had natural acidity from the mild summers and cool winters – a climate of which few outside the country seem to be aware. Moderator Mark Davidson from Wine Australia joked, “I take a certain amount of perverse pleasure” at seeing American journalists arrive in the Adelaide Hills without any warm clothing. “In the cold nights of the Adelaide Hills, they freeze.”
It was clear that the wineries and winemakers at the event were feeling optimistic. But Australia still faces some challenges in the UK. One winery executive privately confessed that the low pound was causing retailers to pressure producers to lower their prices, in order to maintain their margins. Wineries face a tricky dilemma – if they bow to this pressure, their own margins will suffer. And when the pound goes back up, they may struggle to raise their prices again. If it’s to get its most interesting and compelling wines into the UK, Australia will have to focus on the on-trade, as Jewell acknowledges: “It’s glass by glass.”
This article first appeared in Issue 1, 2017 of Meininger’s Wine Business International