23 January 2016
AMAZING WINE EXPORT FIGURES
Peter Gago, Penfolds' chief winemaker, presents Australia's best at his tasting at Wine Spectator's New World Wine Experience at the J. W. Marriot, Los Angeles, October 20th 2012 ... the $200+ per litre (FOB) segment of Australian wine exports increased by 23 per cent in 2015, much of which is the work of the tireless Gago ... photo ©Milton Wordley from our multi award winning book, A year in the life of Grange
Astonishing export boom for Australian premium wine: top end goes nuts; bottom flounders
by PHILIP WHITE
On the feast
day of St Vincent, patron of vintners, it's worth contemplating the sobering export
numbers just released by Wine Australia
Today, 22nd January, being
the Feast Day of the patron saint of vintners, Vincent of Saragossa, it's a
nice* thing to contemplate the Wine Australia export numbers just released.
Wine Australia CEO Andreas
Clark triumphantly announced "Pleasingly, our latest Export Report shows that the value of Australian wine exports grew
in each of the top 15 export markets in the year ended 31 December 2015."
The report shows that the
value of Australian wine exports jumped 14 percent to $2.1 billion in 2015,
reaching its highest value since October 2007.
This is the second consecutive report to show such an increase.
Clark continued:
"This export growth should be warmly welcomed by the Australian
grapegrowing and winemaking community as it is largely a result of their hard
work."
Wrong. The majority of the
grapegrowing and winemaking community has not suddenly discovered how to do
anything better. Nor how to work harder. Most of them still make McDonalds
quality. The reason for this growth is largely because of the tumbling Aussie
dollar, which Clark coyly avoids mentioning. It was similarly low in October
2007.
Call me an economic
conservative, but I reckon any business plan that depends upon its native
currency being undervalued is not quite the full quid.
Sure, with a dollar that's
taken a forty per cent plunge people stay in Australia and drink local because
they can no longer afford to traipse around Old Yurp or Amurkha, and our wine
looks better to those offshore buyers because it's suddenly cheap again so they
buy more.
But that little issue
aside, the makers who have added the most significance to the export hike,
through hard work and reacting sensibly to world demands for finer wines of
lower alcohol, are those tiny minority who make serious premium wine of provenance and unflinching quality and charge
sensibly for it.
The biggest increase in
value, percentage wise, was in the smallest volume sector: expensive bottled
wine: those with a 'free on board' (FOB) value over $10 per litre. The report
shows these increasing by 35 per cent to a record $480 million. They now make
up 23 per cent of the value of Australia’s wine exports.
The value of exported wine
with an FOB of between $10.00 and 14.99 grew 24 per cent. $15.00 to 19.99 grew
55 per cent. $20.00 to 29.99 grew 22 per cent. $30.00 to 49.99 grew 16 per cent.
The single biggest
increase was in the $50.00–99.99 bracket, which surged 59 per cent; this boom
slows down over $100.00 to 199.99, a bracket which grew 40 per cent; the elite
$200.00+ bracket swelled by just 23 per cent.
"Bottled wine has been the key driver of the export success. Bottled
exports increased by 17 per cent to $1.6 billion and the average value
increased by seven per cent to $5.20 per litre. This is the highest value since
2003 on a calendar year basis," Clark said.
Similarly telling is where
all this wine actually went. Buoyed by China's easing of its clampdown on
extravagant expenditure along with a new optimism around the recent trade
agreements, the value of exports to China increased by 66 per cent to $370
million while the Hong Kong number increased 22 per cent to $132 million.
The USA, still burnt by
Australia's tendency to tip supercharged alcoholic gloop into its discount bins
showed a small revival of 4 per cent to $443 million.
Australia's biggest market
by volume, however, increased by only 0.2 per cent to $376 million.
This just happens to be
where our cheapest plonk goes in bulk at the tiniest margins: shipping
containers, each one stuffed with a huge bladder pack full of highly-irrigated booze
for packaging at a pinch in the United Kingdom, the heart of the dead British
Empire.
If they were serious, Wine
Australia would present a breakdown of which of the smart, hard-working,
premium wine producers are responsible for the boom in such top-quality wine.
This writer, just for example, would like to know how much of that is the work
of Penfolds, and more significantly, its chief winemaker Peter Gago, who works
harder than anybody I know wearing out passports as much as shoe leather.
And who, not
co-incidentally, happens to supervise the making of a great deal of wine of
extremely high quality.
The boom in this lofty
sector also vindicates Premier Weatherill's determined drive, with Agriculture
Minister Leon Bignell, to concentrate on top-quality, top-profit food and wine
exports.
But it leaves them with
the source of that giant goonbag business to address: the Murray-Darling. Speaking broadly, the only
wine folks in that huge, water-guzzling Basin who make any money are the
smartest, toughest refinery owners with good mates in the UK.
The further one goes upstream
along that irrigated extravagance, the less likely are its growers to make one
cent of profit.
Last year's report from
the Winemakers' Federation of Australia revealed that if you start at the
bottom of the Murray, at Langhorne Creek, 77% of the fruit grown is sold at a loss, and the
average yield per hectare since 2006 is 9.2 tonnes. As the tonnage grown
reflects the amount of water pumped, the Riverland saw a 92% loss at 20 t/ha.
At Murray-Darling-Swan Hill it's 88% loss at 19.4 t/ha. The Riverina, home of
that adored and touted export miracle, Yellowtail, scores a 97% loss at 14.9
t/ha.
Which leads me back to St
Vincent, and this being his feast day.
Captain Matthew Flinders
named our Gulf St Vincent after his admiralty sponsor, the Rt Hon John Jervis,
1st Earl St Vincent, who'd won the title for his good work with Lord Nelson, butchering
the Spanish at the Battle of Cape St Vincent in 1797.
While I sit here munching
these challenging numbers, wondering like grapegrowers everywhere about today's
moist humidity, lack of drying breezes, and the possibility of mildew and botrytis,
I think of Vince also being the patron of vinegar-makers. And his little
homily:
If St. Vincent's Day be fine,
'Twill be a perfect year for wine.
FOOTNOTE*
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