BEWARE THE SILVERTONGUE DEVILS

Premiumizing the masstigious? 
For bullshit short-term windfalls
it's easier to change the language

by PHILIP WHITE

Strange things happen to the tongues of men in the nether regions of megabulk wine marketing. If they can't squeeze more money from the dodgy plonk, they torture the language. At least it's close to the tongue.

But this is usually a bit late. The best way to wring more consistent profit from the wine business is to improve the quality and the reputation of your booze through an uncommon gastronomic intelligence, regular honesty, hard work on the road, business wizardry at the board table and again in the winery, after fanatical fruit selection and the development of a dedicated, stalwart team.

Not to mention an impossibly good bank which shares your patience with the generation-long cycle and understands the destructive evil of Australia's supermarket duopoly.

This ideal doesn't occur much, because the boards of our huge wine refineries are populated by itinerant blokes with haircuts. They come and go. One minute they may be on the board of an outfit that sells air-conditioned, fully carpeted two storey Irish Wolfhound kennels; the next they have a go at stripping a great wine company, then they'll move on to toothpaste that comes in a tube with a bigger hole. These privateers, or 'directors', climb from failure to failure, taking a few million more in the way of personal financial consideration with each step over the slaves.

The language thing fascinates this writer. Thirty or forty years ago, when our biggest wineries were owned by cigarette companies or laundry powder-and-mop mobs, words like 'synergy', 'ridge' and 'creek' began to appear on press releases and wine labels. These were usually blends of inferior varieties planted by the wrong people in the wrong places for all the wrong reasons and blended according to an annual boardroom directive to 'tip all them tanks in together'.

While working on a speech for Wolf Blass in the mid-eighties, the scribe learned another, more endearing patois. 'Sell wine to Germany', for example, became 'schmite zem mit der Luger', a vinous invasion that was 'same as last time - we go in through Holland". 

This 'Chermanising' was the unfolding creation of dear Wolf, the sort of bloke who can't leave his company, even after he sells it. Wolfie will be eighty in September, but he still tirelessly travels the globe, promoting wine that bears his name but is owned now by Treasury Wine Estates, recently sawn in turn off Fosters. Wolf wants to see anything he started go places.

It's a long time since he took a secret weekend at the Grand Hotel at Glenelg, to have a confidential chat with 'Sting' Ray King, the marauding silver-haired MD of Mildara Wines famous for his hyper-fitness and obsession with racing bicycles.

Wolfie believed the wine industry should be 'ratchionalised'.

"We were going down the stairs to breakfast," Wolfie recalled, "me in my track suit and Ray in his little bicycle chorts. That's when I looked at him and said 'Well Ray, what are you going to be paying me for my company?'"

This brilliant backroom business tryst was not secret for long: they stepped off the stairway into the restaurant where the Australian Wine and Brandy Corporation was holding a board meeting. Village life. After this, King became much more commonly known as 'The Silver Fox'.

Some contrast: as the Sands brothers, those glamourpuss boyos from upstate New York, managed to burn $1.6 billion in their disastrous six-year BRL-Hardy adventure, they floated the word 'premiumise', which was probably spelt with a z come to think of it. One couldn't help relating it to 'weaponize', which was George W Bush's quaint term for the highly-processed  uranium he told us that Saddam Hussein had by the tonne. Not.

Premiumize means something along the lines of 'flogging more ordinary plonk at an extraordinary profit,' and soon led to them Yankees shredding this grand Australian family company through their Constellation outfit and flogging it to a non-winemaking investment mob called Champ. So pioneer Thomas Hardy's old brand is called Accolade now.

Clap, clap.

The writer quotes himself, in suggesting these names sound like Korean cars. Which is fitting, given the resale value.

 

Premiumizing. By the bowels of Bacchus this is twisted.

One suspects there's a touch more trust in the promises of Michael Clarke, the new boss determined to convert Confederate money to gold bars at Treasury. Clarke came in from an impressive international career at Coca Cola and an eighteen month blietzkrieg of chainsaw and refinancing at Premier Foods, which given that company's basket case, was known as the toughest job in Europe for moving consumer goods fast.

Another who knows how supermarkets work is Terry Davis, chief of Coca-Cola Amatil until next month.  For a while many presumed he'd soon be on the Treasury board; even M-D, but no.  After years building Cellarmasters, he sold that to Woolworths, and always looked like a bloke with the nous to do well with Treasury. Even after his contentious US$1.5 billion purchase of the notoriously tricky Beringer as a Fosters boss, he sometimes looks like understanding how to make the best of what remains of Treasury's vast and varied assets, from the world's biggest boutique in Penfolds premiums to what the cellarats call the Death Star: the giant Wolf Blass Bilyara Winery on the road to the River at Nuriootpa. Not to mention Beringer, the oldest and one-time biggest in the Napa. Knowing that there's an ex-Coke man running Treasury anyway, Terry's leaving Coke with a telling new product: cute little tins of premiumised mixers called Cascade. They're as way cool as way dry: your G&T never tasted more adult.

One would pray Michael Clarke did not choose the word 'masstige' as his fulcrum to lever Treasury up the required notches. But somebody did. Masstige. It's been all over their press material like a rash. Masstige was evangelised by Michael Silverstein and Neil Fiske in Trading Up, their 2004 book and Harvard Business Review article. It's like premiumize. It's a naïvely hopeful marketer's term for the act of convincing many aspirant people that a product is suddenly worth a lot more than everyone else would consider a reasonable price. 

Clarke's clever modus extant convinces the writer that this useage is the work of some marketing Gollum, and not Michael Clarke. The smartest thing any boss of Penfolds has suggested in decades is his gradual separation of the Death Star refinery megabulks, like Koonunga Hill, Rawson's Retreat and anything without a bin number, from all the superior wines with numbers above, the best of which are hand-made in Penfolds' smaller wineries at Magill and Nuriootpa. 

Meaning you could maybe in a dream world sell all of Treasury, with these discounted megabulks, but keep the best bits of Penfolds, its most profitable and delicious aspect.

Clarke's announced a $260 million write-off in preparation for a 'Reset Year' in 2015. And to make it easier for everybody, he's moving the release date of all those upper echelon Penfolds glories from the middle of vintage to October, something the winemakers have been begging after for many years.

I'm sure Wolf Blass will be in Clarke's ear about the brand that carries his proud name. It was heartening to watch Wolf rock up at Doug Lehmann's wake with his right-hand winemaker, John Glaetzer. 

The author with Wolf and John "Ferrett" Glaetzer at Doug Lehmann's wake. Working at the time from a couple of small ColorBond sheds, these two built an empire on three consecutive Jimmy Watson trophies. Fanatical fruit selection, mainly from their beloved Langhorne Creek, and radical winemaking made their truth a lot easier to tell.  "No wood no good," was Glaetzer's mantra, "no medals no jobs."  When Wolfie sold to Ray King they built the giant Bilyara winery and won another ... their hoard continues to grow, now for Treasury Wine Estates ... photo John Preece

Between them, this genius duo won, consecutively, the Jimmy Watson Trophy three times and the Montgomery Trophy for best red wine in the Royal Adelaide Wine Show six times. Consecutively. That's just a tiny part of the fabulous hoard they assembled.

Possibly unrelated, but pertinent: For many years this storificator was derided for the application of the word 'refinery' to wineries which looked like that. But somewhere lies the  propaganda bunker's press release boasting of the efficiencies expected at Bilyara because The Silver Fox's new board had hired a refinery engineer from the petroleum business to design the bugger.

Some refineries can even turn coal to coke.

A real refinery with stills as well as tanks.