CONSTELLATION CUTS AT McLAREN VALE

CHATEAU REYNELLA: CONSTELLATION'S AUSTRALIAN HEADQUARTERS. FOR NOW. photo KATE ELMES

From The Vintage Archive: Constellation Kicks Heads;
Hardys Gut Their Own Mother
by PHILIP WHITE ... a version of this story appeared in The Independent Weekly in February

One week is an eternity when you’re in the wine business and you’re looking vintage in the eye.

I’m writing a week before you’ll read this, and the grapegrowers in this neck of the woods – McLaren Vale – can’t believe their fortune. The extreme heatwaves earlier were mercifully brief, and those with a good carpet of sward have seen their earth retain a lot of the moisture from those lovely rains. It’s been humid, like Bordeaux, but persistent breezes are thus far keeping everything clean and dry in the vineyard canopies. Warm days, cool nights – 2010 could be the best vintage in many years. If it holds.

But in the face of what appears from here to be a cracker year, there’s the little matter of financial reality staring the growers down. McLaren Vale, like many other districts, faces the horror of sudden, violent price cuts: there’ll be no new Beemers and Benzes this year. Or next. The wine industry disaster does not stop in the Murray-Darling Basin.

Imagine you’re a Vales grower with, say, twenty acres of something special, and twenty of your cash cow industrial-grade stuff. You’re used to getting, say $3,000 or more for a tonne of your old bushvine shiraz, and $1,500 a tonne for the rest. The buyer from the big company walks in this week and sagely advises that because of the surplus, there’s oversupply, and you’ll be getting, well ... “What say we offer you $1,000 a tonne for the whole lot. Save you the embarrassment of leaving the crap half unpicked.”

You’re barely covering your cost, if at all. If you’re silly enough to grow Chardonnay, $500 a tonne seems magically generous - you can buy finished Riverland Chardonnay from tank for .50 cents a litre.

Constellation Wines, the world’s biggest wine company, competes with Fosters to buy McLaren Vale fruit. Fresh from uprooting John Reynell’s priceless 162 year old vineyard to make way for a yuppie ghetto, this mighty transnational has decided no Vales fruit is worth much more than $1,000 per tonne. Unless you make the cut for the super-premium Eileen Hardy red, you won’t be getting more than $1,000 per tonne, and many will be getting much less. All the medium-grade fruit - McLaren Vale’s specialty - that usually earns $3,000 per tonne (Grade 3) or $1,800 (Grade 4) will be pulling $1,000 max. Even the great prices offered Eileen Hardy quality fruit are to be disbelieved, as Constellation made no Eileen at all last year, and only a relatively tiny amount the year before.

In the letter Constellation sent last week to its growers, it even offers them a one-year break from their contracts, should they find more generous buyers. But like any Indian giver, it announced this news far too late for most growers to find new buyers. Also worth noting, that as far as Constellation is concerned, the discount Oomoo is now on a par with Tintara, with $1,200 per tonne being the maximum “bonus” offer for fruit for both. Which was earning two or three times that price two or three years ago.

Constellation called a meeting of growers at the Tintara Winery on 21 January, and made them an unacceptable offer. The growers left with a promise that Constellation would reconsider. But the forthcoming letter contained precisely what nobody wanted to hear, let alone believe.

“At the meeting, CWAU agreed to increase the price initially offered for Mataro from $1,000 per tonne to $1,100 per tonne and undertook to reconsider prices offered for Cabernet sauvignon, Shiraz, and Grenache. CWAU has now reviewed the initial prices offered for Cabernet sauvignon, Shiraz and Grenache, and believes the indicative prices offered represent fair market prices for the 2010 vintage.” This came from Adam Steer,
Constellation’s boss viticulturist.

So they went soft on Mataro, aka Mourvedre or Monastrell, to the tune of 10% of bugger all. That was their sweetener. If they buy more than 40 tonnes of Mataro this year I’ll drink it all personally.

What they’ve done is remove the heart of the district’s income. Growers were going to great lengths to improve their viticulture and quality of fruit so they’d be nudged up to B and C grade prices, not D-. So there’s only one sort of fruit in the big buyer’s eyes, and that’s that: the mention of the Eileen Hardy name was a huge frigging tease.

“We appreciate your efforts to produce premium quality fruit and look forward to the 2010 vintage”, Steer signed off. “At this point, we will assume that your fruit will be delivered to the Tintara Winery unless we hear otherwise. Please contact me as soon as possible if this is not the case.”

Add all the viticulture consultants, the tractor dealers, the farm supplies businesses, fuel suppliers, hoteliers, restaurateurs and whatnot who will be gutted by this, and you’re only just starting to get the picture.

BEYOND THE FEN LIES THE VINEYARD JOHN REYNELL FIRST PLANTED 162 YEARS AGO. CONSTELLATION HAD IT REMOVED FROM A HERITAGE LISTING LAST YEAR, AND IT IS NOW INTENSIVE HOUSING photo KATE ELMES

And It Got Even Worse
PHILIP WHITE IN THE INDEPENDENT WEEKLY 16TH APRIL

A near-perfect vintage is grinding to its close. But South Australian grapegrowers are reeling from the irony of their lot: while 2010 is one of the best quality harvests in decades, international oversupply puts their livelihoods under severe and immediate threat.

In fact, all the numbers are perfect apart from the price.

The cool, mild weather has kept natural acids high, perfumes pretty, colours and tannins intense, and pH levels easy to manage.

But many growers who were getting used to $3000 a tonne are looking at the loss of that last critical zero this year.

Many vineyards have been left unpicked; many are available for sale at ridiculous prices. Some growers cannot afford to hire a bulldozer to clear their land for sale or other uses.

In a real test for the planners, the South Australian countryside is set to undergo a major change of appearance as vineyards disappear.

Tetchy banks will lend you money to buy your little farmlet with its home, garage and pool, but make one mention of the twenty acres of Chardonnay and the loan’s likely to evaporate on the desk.

The record heatwave of early November damaged many vines at their critical flowering moment, destroying most of the Grenache, and various other varieties.

But the following weather was mild and reliable, and most varieties pretty much cruised through. Only to be worth two fifths of bugger all.

Tales of great meanness continually arise. In McLaren Vale, growers are enraged that brokers who offer them $300 per tonne for fruit that has cost them twice that much to grow, then have the audacity to put $150 on their retail price.

“They will get my land”, one tormented grower told The Independent. “I have nothing else to do. The bank will lose patience. My property loses value every day.”