“Sod the wine, I want to suck on the writing. This man White is an instinctive writer, bloody rare to find one who actually pulls it off, as in still gets a meaning across with concision. Sharp arbitrage of speed and risk, closest thing I can think of to Cicero’s ‘motus continuum animi.’

Probably takes a drink or two to connect like that: he literally paints his senses on the page.”


DBC Pierre (Vernon God Little, Ludmila’s Broken English, Lights Out In Wonderland ... Winner: Booker prize; Whitbread prize; Bollinger Wodehouse Everyman prize; James Joyce Award from the Literary & Historical Society of University College Dublin)


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01 April 2011

URGENT NEED FOR FULL-SCALE ENQUIRY

Australian Wine Biz: Shattered
Chaos Demands Forensic Probe
Time For Some Due Diligence

by PHILIP WHITE - a version of this was published on InDaily

Given the chaos and destruction rife across the Australian wine industry this vintage, there must be somebody, somewhere, willing to address the entire wreckage with an astute judicial review.

The mighty Australian wine boom depended on three presumptions, breath-taking in their hubris: an illogically-biased tax system, an endless supply of impossibly cheap water, and an unnaturally weak dollar.

Two of these three have rightly gone; the third, the ridiculous tax advantage, will also inevitably, eventually evaporate.
We have Tony Windsor, the Federal Independent Member for New England, running his investigatory committee suggesting there may be no need to cut irrigation allocations in the Murray-Darling Basin if everybody suddenly gets efficient; on the other hand a mess of commissions and policy wonks and Craig Knowles and the Murray Darling Basin Authority going all soft and gooey rather than hardening sternly on the management of the river system we have almost destroyed.

We have huge refineries and industrial grapeyards using up to 1200 litres of water to make one litre of wine which sells for less than the cost of good bottled water but is three times the alcoholic strength of your average beer. And twice as sweet.

In a country which usually has no water.

We have entire Murray-Darling communities going broke, a river system which is on the nose and worsening the further down you go, and professional long-term grape-growing families finding it impossible to compete with faceless tax-dodging conglomerates who plant enormous industrial grapeyards and don’t seem to care much whether they make a profit or not.

We have the ridiculous obsessions of our biggest grape ethanol manufacturers with the discount bins of Britain and Australia whilst they simultaneously go to war with the killer Australian duopoly, Coles and Woolworths, for control of the part of business where there’s barely any profit.

We have the unseemly hissy between the Prime Minister and the Leader of the Opposition as they taunt each other to do something about the horrendous alcohol abuse which is wrecking Alice Springs and all those misplaced desert mobs.

We spend well over $16 billion a year addressing alcohol-related harm, yet never connect that a great deal of this destruction comes from the bladder pack plonks which make up half of our national wine consumption and come from the wreck of the river.

We have treasury boss Ken Henry departing, leaving unaddressed his suggestion that part of the way to fix all this is the replacing of the current tax system – which is jigged to assist the bladder refineries – with a simple excise tax, which would treat all alcohol equally whilst decreasing the price of good wine, and increasing dramatically the price of goonbag plonk.

That suggestion’s still sitting there on the Federal leather, as obvious and popular as a steaming turd.

We have Jacob’s Creek, which is French, the cadaver of Constellation, which was American, and Fosters, which is from somewhere else entirely, running most of the show while they also run for it.

We have total disarray in the enormous and diverse wine industry councils and representative bodies, proven useless to the extent that the old family companies who set them all up have now formed their own marketing and shared-interest body, Family First Wineries, as a direct rival.

And this week we had Professor Larry Lockshin, of the University of Adelaide, releasing a report which found – surprise, surprise – that people mainly buy wine on price.

Anyone who has an honest grasp of the droll homogeneous nature of most of Australia’s wine would suggest there is no other sane method of making the selection. Who do they think we are? Do they really think we believe their tacky little bling stickers indicate any sparkles in the Stalinist monoculture of most of the wine in Australia?

There must surely be somebody out there who realizes that all this is connected: it is indeed the one big problem. Its monetary, environmental and social cost increases annually, and there’s not a soul in public life with the wit and balls to stand up and demand a complete, forensic, public examination of wine’s role in Australian life, and how it can be steered to offer a brighter, more positive reflection of our civilization and its propensity to conserve what is good.

Which is what conservative once meant.

Not to mention our gastronomic creativity, which is NOT reflected in ninety per cent of our wine.

And now, in a vintage where it seems very little of anything good can be conserved, where many of the wrong people will go unfairly to the wall, the whole damn wreck is screaming like never before for some astute intellectual attention.

Where might this come from?

The shattered and soused grape cockies of the Murray-Darling won’t be asking for it. Tony Windsor won’t be asking for it. The Federal leaders won’t be asking for it. Coles, Woolies, Jacob’s Creek, whatever’s left of Constellation and Fosters won’t be asking for it. The Family First wineries won’t be asking for it – half of them depend on Murray-Darling fruit. The independent retailers won’t be asking for it.

Which leaves us with the tattered broke specialist growers who have no respected representative body.

No money or poke there.

It leaves us with over 2,400 boutique winemakers, most of whom produce little product of any gastronomic exception, having got into the business for all the wrong reasons.

Total disarray there.

It leaves us with the medical lobby; the health professionals who would dearly love to see their tragic end of this addressed: but dangers of this being seen as neo-prohibitionism dilute its legitimacy from the start.

It leaves us with the fanatical proho dries, who all seem too busy getting rich in the name of Jesus to worry much.

It leaves us with the Police, who would love it, but can’t get sufficiently political to really scream for it.

It leaves us with the representatives of the wrecked aboriginal communities in the bed of the Todd River, who have been begging for it, to no avail.

Indeed there’s the perfect metaphor for the idiocy of all this: in the name of the finer things of life we are tipping one dying river system into an even drier one, the Todd, butchering the communities at both ends.

So who’s the saviour? The Greens? Nick Xenophon? Ken Henry?

Would anybody listen?

32 comments:

Richard Smith said...

firking great article..Looks like you're the only one that ca save us now philip...Go get em!

Kyle Crick said...

Phew, Nuff said & Well said !

deserving better said...

I've been waiting for someone to ask these VERY OBVIOUS questions. You have. Now we'll settle back and enjoy the silence, shall we?

Rebecca @InsideCuisine.com said...

poignant! your voice - necessary and timely ... from a small seed a mighty trunk may grow

The truth is out there said...

You rock, Mr. White. Consistently.

The political owl said...

All too true.
It surely is madness to be using good water to turn into wine that sells for less than water.

JM Darkly said...

Agree with you 100%, you are a lone wolf. I believe this is all coming to a head like a pus on a pimple that needs to be popped. The environment can not stand it any longer - and Australia is the first place where the environment seems to show it's stress marks. There has been a stressful time in Australia over the past year (floods after drought as the national anthem sings) so hopefully yields will be less and that will sort out the Au and UK supermarkets by necessity. There are people out there who are not "represented" but all this will be a blessing in disguise. Also, the line about creativity not represented in wine could be the best thing that came out of Australia in years. Bon weekend and Best wishes, Juel

Anonymous said...

What will happen when the Chinese buy our land and vineyards?? Government needs to get off their hands

green tea said...

The Chinese are already in here, selecting helpless targets, making broke farmers offers they can't refuse, knowing fully those poor strugglers have no money for good solid independent financial advice on the contracts.

Andrewmargan said...

Hi Philip, The bit you left out is the elephant in the room. The industry is lead and run by the big boys. You can see what a great job they have done leading us up this big shit creek and now leaving us here without a paddle. Until they depart the industry will continue to be in a mess as they create the unreal market conditions that make it impossible fo us to fix the market problems. Don't get me started on the lack of leadership in our industry!!

T-Mon said...

http://www.stuff.co.nz/dominion-post/news/4851223/Chinese-group-buys-Hawkes-Bay-winery

Jenny said...

Interesting questions. So, what are the answers? As a wino myself it's very easy to see all the negatives, but I would be very interested to hear your ideas for getting us all out of this muddle.

Cameron said...

As someone who works in the wine industry, but who has experience working in every sector of the alcohol market, I can tell you that the current approach to the taxation of alcohol is a complete dogs breakfast that has been manipulated by vested interests over time. We have a situation where wine, depending on its value can either be the lowest taxed alcoholic beverage or the highest tax on a per standard drink or quantity of alcohol basis. This leads to outcomes where the big retailers are able to sell cleanskin wines at $2.00 per bottle or 5 litre casks for $10.00 to $12.00 whereas a single bottle of wine that retails for $40.00 will contain around $9.00 of tax. Beer is taxed differently depending on whether you buy it in packaged or keg form and enjoys a tax break on the first 1.15% of alcohol content due to the influence of powerful lobby groups funded by breweries and pubs.

Despite all the noise that the government has made about the dangers of alcopops I have seen study after study where the the main product contributing to dangerous and health damaging drinking is cask wine.

So despite the completely biased and irresponsible headline I believe it is time to seriously look at substantial tax reform on alcohol. I would strongly favour a single excise rate based on the quantity of alcohol in a product to be applied equally to all alcoholic beverages.

Cameron | Melbourne - April 12, 2011, 9:20AM - (From The Age report on this article)

Brett said...

the long term future of the wine industry requires alcohol tax reform.

Australia is mostly trying to produce low priced wine in a high cost country, and other countries can do it cheaper.

All most all of the small wineries are tax-efficient hobby farms.

Brett | Richmond - April 12, 2011, 7:44AM (from The Age report on this story)

John C said...

Sounds like a good idea in essence because we all know that the issues of Indigenous alcoholism and decreased Murray River flows are very real and serious ones. It's unfortunate that The Age website has given this article the working title "Wine Guru robs poor, gives to rich". This seems to distract the reader from the real point with rash sensationalism.

Jon C | On Vacation - April 12, 2011, 8:21AM (from The Age report on this article)

Davo said...

much of it is sold to Aborigines? Indigenous communities? Apart from being an insufferable wine snob, White (what a lovely irony) is a rascist as well? How condescending. The wine is sold for very little profit? So, still still making a profit, then? Just not a big enough profit? Iam neither Aboriine nor live in a, indienous coummunity and I prefer to drink cask wine. At least when I drink it, I don't have to suffer the company of wine snobs and rascists

Davo - April 12, 2011, 8:15AM (from The Age report of this story)

Kalucy said...

Who would have thought 10 years ago that people would pay $20 for a packet of smokes? People will still pay for casks, but it might reduce the impact somewhat. Good move I say.

Kalucy | Sydney - April 12, 2011, 8:12AM (from The Age report on this story)

LP said...

I second Jon C. The title of this article misrepresents what this entire issue is all about. Alcohol (or specifically, the enthanol in our beverages) should never be allowed to be that cheap.

LP | Doncaster - April 12, 2011, 8:49AM (from The Age report on this story)

Greg Platt said...

The Henry review got it right with taxation of alcohol, except for one point. The sugar in alcoholic drinks should be taxed as if it were alcohol.

And if you re-read Swan's comments, you'll see he's ruling out Henry's proposal only because of timing. The wine industry goes through cycles where it's got a glut & is ripping out vines and then a few years later there's a shortage & there's a mad scramble to plant the latest fashionable varieties.

Greg Platt | Brunswick - April 12, 2011, 8:48AM (this is from The Age report on this story)

Winemaker Anne said...

$34 for a 4 litre cask is still cheap, works out about $6 a bottle. And it aint "paint stripper", in most cases, Australian cask wine is good quaffable wine without any faults. More than can be said of overseas bulk wine. In light of Cameron's insights, seems like Phillip White is the right in proposing reform which would increase the price of casks. $34 a cask is still great value.

Winemaker Anne | Melbourne - April 12, 2011, 9:41AM (from The Age report of this story)

Winemaker Anne said...

$34 for a 4 litre cask is still cheap, works out about $6 a bottle. And it aint "paint stripper", in most cases, Australian cask wine is good quaffable wine without any faults. More than can be said of overseas bulk wine. In light of Cameron's insights, seems like Phillip White is the right in proposing reform which would increase the price of casks. $34 a cask is still great value.

Winemaker Anne | Melbourne - April 12, 2011, 9:41AM (from The Age report of this story)

Shane James said...

This bloke may be a Leading Wine Industry figure but he is not the Government. Philip White is the editor of a wine industry website and this article is extrapolating his comments into Government policy already.

Must be a slow news day.

Shane James | Morwell - April 12, 2011, 10:39AM (from The Age report of this story)

Andrew said...

It would seem to be be such an obvious and overdue reform to the alchohol tax. Presumably the reason we tax alchohol is because of the imacts on society and health of problem drinking. It makes sense to tax alchohol by volume rather than price.

If there are concerns about a volume tax unfairly impacting low income groups we could offer alchohol tax rebates to low income earners. Seriously, the current situation of having cheap cask wine readily available to problem drinkers and problem drinking communities is creating real social and health problems.

Raising the price of this cheap alchohol will have a real effect in reducing the negative effects of its consumtion. To refuse to do this on the basis of protecting an industry that supplies cheap alchohol to problem drinkers is irresponsible and unnacceptable.

Andrew | Reservoir - April 12, 2011, 10:38AM (from The Age report of this story)

Andrew said...

It would seem to be be such an obvious and overdue reform to the alchohol tax. Presumably the reason we tax alchohol is because of the imacts on society and health of problem drinking. It makes sense to tax alchohol by volume rather than price.

If there are concerns about a volume tax unfairly impacting low income groups we could offer alchohol tax rebates to low income earners. Seriously, the current situation of having cheap cask wine readily available to problem drinkers and problem drinking communities is creating real social and health problems.

Raising the price of this cheap alchohol will have a real effect in reducing the negative effects of its consumtion. To refuse to do this on the basis of protecting an industry that supplies cheap alchohol to problem drinkers is irresponsible and unnacceptable.

Andrew | Reservoir - April 12, 2011, 10:38AM (from The Age report of this story)

hj said...

How is making grappa the cheapest drink going to reduce violence or the health effects of alcohol ?

hj-90 - April 12, 2011, 11:37AM (from The Age report on this aticle)

Karen said...

Why isn't wine taxed on alcohol volume/standard drinks per bottle like beer? I'd like to see that, to be honest. Then I won't have to pay $15 for low alcohol wine, which is much better for me.

Karen - April 12, 2011, 11:45AM (from The Age report on this aticle)

Russell Goldflam said...

Good on ya Philip. Not only have you hit the nail on the head, but you do so in great rollicking style.

Here in Alice Springs, where, to use your words, "the wrecked aboriginal communities in the bed of the Todd River" live, we daily see many of our fellow citizens waste themselves daily on cheapo plonk. For us, this isn't an arid argument about the technicalities of taxation: it's a burning issue which requires real political leadership. The Northern Territory Government could and should legislate a minimum floor price for grog. And the Commonwealth should follow Ken Henry's advice, and introduce a volumetric taxation of alcohol.

When something similar was done over a period of 5 years in the 1990s in the NT, 129 lives, and $124,000,000 were saved. Really? Yes! Read this: http://members.ozemail.com.au/~pipmcmanus/Damming%20the%20Rivers%20of%20Grog.pdf

WHITEY said...

Thanks Russell. You can imagine how much I love being called a racist for taking this stance. I shall spread your link. Keep the faith.

irrigated grape-grower said...

"Up tp 1200 litres...", come on Philip, that's not a representative statement. The industry is many times better than that.
Are you against just 'river' (MIA, Sunraysia, Riverland) wine-grape growing or all irrigated (to any extent whatever) wine-grape growing in the Murray-Darling Basin?
Are you aware that if the ENTIRE wine-grape industry of the three 'river' areas were abolished, it would save less than 20% of the 3,000 Gig proposed by the Murray-Darling Basin Plan.
Are you against all irrigated industries in the Murray-Darling Basin, ie, beef, cereals, cotton, dairy, fruit, rice, vegetables, wool, etc., or just wine-grapes?
(As an aside, are you Adelaide-based? Do you resent being the last to take your share of the Murray-Darling?)
Is it the harmful effects of cask wine that is the issue, if so, and price is the determining factor, what proportion of 'river' fruit ends up in casks or $2 cleanskins?
Is the issue aboriginal health here, or anybody who has an issue with cask wine consumption? What (small) proportion of cask wine consumers would that be?
Are you promoting the massive raising of prices of a) sharp objects because of the danger to haemophiliacs, or b) petrol for the danger to petrol sniffers? I'm sure price has an effect on these purchases, too.
Do you see no merit whatsoever in the industry base that took Australian wine to the world, or are you just a wine snob that would rather that we quietly disappeared, even at great pain to numerous communities?
I agree that the Age's banner was misleading: a Guru should have some genuine wisdom of his subject.

Harley Wright said...

Wow, I thought I’d never see such a responsible and objective – and sparkling - piece on alcohol tax/excise from the industry. And am even more impressed with the strong support for this stand in subsequent comments. Perhaps those who may not support this approach are lying low?
I’d thought that Swan’s and the Government’s avoidance of the issue, post Henry, was because they saw it as “too hard”. As well as cries from the big boys, there would be hundreds of boutique vineyards and wineries dependent on this absurd tax regime. So pollies could fear political clamour in rural electorates at any hint of change.
How do we effect sensible policy change for the greater common good when a few wheels will squeak loudly? And some people may lose their jobs and have to do something else? Mm, a tough one for the pollies. Remember the Cotton car plan? Australia had a large car manufacturing industry protected by massive tariff barriers. Ditto clothing and footwear. Common sense said this was costing Australian consumers and our economy dearly. We’d be better off without tariff protection, we could buy cheaper imported cars – but the car industry would be rationalised. Rather than do this in one cathartic hit, Senator Button brought in a phased wind back of the tariffs for cars, clothing and footwear. This allowed those affected to plan and rationalise in an orderly way. A long term goal can set an efficient path to responsible and desirable change. It can facilitate the restructuring and phase out of some existing capital for maximum utilisation.
A consultative review of Henry’s excise recommendation could propose a phased change to a sensible and agreed new regime. This should soothe the squeaky wheels. Economic, health and social aspects would be important inputs. Let’s do it!
Harley Wright

ABC NEWS 19apr11 said...

A wine industry advisory firm says the wine glut is causing casualties in the industry, with a rise in the number of vineyards being put up for sale in South Australia.

Gaetjens Langley says the vineyard property market is severely depressed as a result of high export prices and diseases bought on by a wet summer.

Company director Toby Langley says vineyards are selling for not much more than their land value as producers hurry to exit the ailing industry.

"There's examples of vineyards that perhaps were purchased 10 years ago for $80,000 a hectare, that vineyard would achieve about $30,000 a hectare today, so over a 10-year period it's more than halved in value," he said.

Veteran grape grower Leo Pech has had his Tanunda vineyard on the market for a year but says there has so far been little interest.

He is calling for a national inquiry or royal commission into the state of the Australian wine industry.

"The term royal commission may appear a little heavy but because of the seriousness of hardships that wineries have experienced in the past, billions of dollars have been lost to the national economy because of the errors that have been made in the past," he said.

A Bear said...

http://adl.brs.gov.au/data/warehouse/pe_abares99001804/RR11.03WineGrapeProjectionsREPORT.pdf

scary stuff in here Phillip