GREENOCK CREEK ROENNFELDT ROAD VINEYARD AT HARVEST: BUGGER-ALL IRRIGATION; NEVER MORE THAN A TONNE PER ACRE; HAND-MADE; ONE OR TWO BARRELS A YEAR; $190 A BOTTLE; HUNDREDS OF PARKER POINTS; ALWAYS SELLS OUT - SUSTAINABLE? INDUSTRIAL? LEO DAVIS PHOTO
Australian Wine Industry Goes Off In Summer Break
Sudden Sicko Revelations On New Year's Eve
by PHILIP WHITE
“Wine industry grapples for new hook” croaked the Sydney Morning Herald on December 31.
Precisely who it was that decided to run this piece of deep misery on the last day of the year, when most readers are too full of the fruits of the wine biz to remember anything, let alone read, remains to be seen.
I’m sure it was dumped, like the unseemly crock it is, by somebody who hoped it would just sort of gradually break down and dribble through the many levels of the business nice and easy over the summer holidays, so’s not to cause too much of a stink all at once.
Reminds me of John writing in The Holy Bible, King James Version, in chapter 3, verse 13 of his gospel: “And this is the condemnation, that light is come into the world, and men loved darkness rather than light, because their deeds were evil.”
Good enough reason to keep the stink under a tin until dark falls on New Year’s Eve and the whole nation gets maggoted, eh?
Having sat watching this nefarious business for thirty years, I feel vaguely qualified to respond to this article, bit by bit.
The wine industry was exposed to some unpalatable truths this year, as the Australian Wine and Brandy Corporation acknowledged that vineyards and winemakers would need to make major changes if they are to survive an ever growing plethora of challenges.
Well, yes. This is the body that has overseen the dumbest broadscale rooting of the Australian countryside, local economies, public health, families, environment and water during the last decades. Its board includes nobody who grows grapes; nobody with actual investment in the wine industry; nobody I would call a particularly talented hands-on winemaker. (There is one winemaking director who is on the board for his marketing skills, according to the original press statements). Two of its small number work for huge transnational companies (Pernod-Ricard; Louis Vuitton Moet Hennessey) which are direct rivals of the Australian wine business. Its members change in about one quarter the time it takes a responsible winemaker to decide upon a flavour, find the land, prepare it, plant it, harvest it, convert it from primary to secondary product in the winery, mature it, package it as something gastronomically attractive, market it, promote it, sell it, distribute it, and see it winning respect.
Major changes indeed.
With the preceding "boom time" party now well and truly over, 2009 could prove to be a major turning point for the consortium as small and large operations alike look for innovative measures to help the Australian wine industry recover from what has been a long-running hangover.
Yes. As I have consistently written for thirty years, there is no point in the driest country on Earth buggering arid land and wasting precious water to make cheap rotgut bladder pack quality wine which is two or three times the strength of your average beer for sale to the world at the price of imported water.
2009 IS the major turning point. Things have already changed, and admitting this on New Year’s Eve will not make the facts go away.
This industry is cactus whether these geniuses look for innovative measures or not.
The confronting reality for Australia's wine industry is actually a cautionary tale for all producing countries, says the Australian Wine and Brandy Corporation.
Well, yes. The Australian wine industry should immediately advise the world to drop the Australian winemaking recipe immediately. It is Australia’s duty. Through its great publicly-funded halls of academe, like the University of Adelaide, this industry trained thousands of winemakers and sent them out like apostles around the world to advise our rivals how to do things our way. We never seemed to realise that because they had the equivalent of slave labour, no environmental restrictions, and either plenty of water or plenty of water which could be procured illicitly, we never seemed to realise that these countries would be able to make cheaper wine than Australia could.
So before their environments fail like Australia’s, before their water dries out, before their communities drink themselves to oblivion and ruin, of course we should be out there, telling them to stop.
The University of Adelaide should quickly knock a course together, offering a doctorate in how to undo what we’ve just taught these hapless copyists to do.
The people who have encouraged the Australian wine industry to develop to this sickening delusion should all be on the road, at their own expense, apologising, and helping put things right. In Georgia, Romania, China, India, Argentina, Chile ... wherever it’s necessary.
The corporation's market development manager, Paul Henry, says the industry will in all likelihood face production without profit and diminishing bargaining power in the face of attritional retail dynamics caused by the global financial crisis.
Well, yes, and all the above. Has anybody sat down and considered precisely how much wine the world should be expected to drink? That would a handy number to have before we encounter tricky difficulties like the global financial crisis, which wasn’t really much of a surprise to those of us who live moderately and watch.
Despite the ongoing drought, wine production went up this year, according to the Australian Bureau of Statistics (ABS), but lower domestic sales and a drop in exports led to a surplus in wine stocks.
Yes. But this was no surprise. The whole business was looking forward to a bumper harvest until the Lord smote the grapeyards with withering heat. The heat was the surprise. The export slump was predicted; the increase in yields per acre and total tonnes harvested was exactly what the University of Adelaide and the Australian Wine and Brandy Corporation have been struggling for decades to achieve. This oversupply – two billion litres in tank at the moment, and another good vintage looming – is the direct result of everything everyone’s struggled for. Just how this industry could justify the use of the extra water required to achieve these enormous increases should confound and enrage the entire community.
"Global financial crisis aside, Australia has manoeuvred itself into a situation where innovation and efficiency in production has outstripped the sector's own ability to manage that capacity," Mr Henry said.
What did I just say?
Exports of Australian wine fell by nine per cent to 715 million litres and the United Kingdom remained the largest importer of Australian wine, taking 268 million litres valued at $895 million. However, Mr Henry says Australia's competitors should be mindful of being hubris.
I think that should be hubristic.
I’ve only met Paul Henry once, and on that short occasion he impressed me. He seemed to understand that he was on his donkey, riding into a seething Jerusalem. But I got the feeling that the only eternal life he could see was the history he’d leave behind. There are not many successful liquidators remembered down through the years.
"These current market and structural challenges are not exclusive to Australia ... they are common to the development cycle of all wine producing countries," he said.
Well, yes, apart from the fact that this country seems to be withering, bleaching and cracking rather faster than those with snow-peaked mountains providing them with ongoing life.
There are no environmental scientists on the board of the Australian Wine And Brandy Corporation, either.
Remaining optimistic the industry will return to its former days of glory, Mr Henry said the real judgment call should not be based on how Australian viniculturists got themselves into such a difficult supply and demand situation, but rather, how and when the industry will get itself out.
Yes, of course. Savoury though the notion be, there is little point in stringing the whole roadside with crucifixes. But what should happen immediately is the old guard, who got this amazing industry into this decrepitude, should never, ever be given another chance. They should take their money and the remnants of their glossy gastroporn fame, and retire, planting native vegetation as they go. They should have no further influence over our own great public institutions, like the University of Adelaide. They should never be permitted to represent or influence this country anywhere, ever.
Which brings us to the question: is there sufficient hot young blood hiding in the hallways and annexes of the Universities and the great glimmering refineries of this country to come out and lead? Have we trained any? If we did, would we recognise them? Are they brave enough to speak? Do they have the intellectual and moral exactitude to do this awful job?
If we haven’t trained any such leaders, then those in charge should in fact be crucified on the roadsides after all.
"The stated aim of the industry is to identify a credible premium to be paid for Australian wine and to move our production and marketing platform towards a quality vision that celebrates sustainable value above unprofitable volume growth," he says.
Doesn’t that mean make better wine at better prices if indeed the environment permits, the market desires, and government tolerates?
Although at the end of 2007 there was concern there would be a mass exodus from viniculture in Australia, experts now say the removal of several vineyards is necessary if the industry is to remain on a sustainable footing.
Several vineyards? The whole mentality of the current “industry” – and that’s it’s own word – is to continue planting enormous broadacre monocultural grapeyards the like of which continue to be planted, lickety-split, right up the Murray darling Basin into Queensland, and all over the bits of the south-western corner of Western Australia which aren’t already dying under intensive bluegum plantations.
The whole mentality of the current “industry” is to keep the grape prices down by forcing out of business the specialist families who’ve hand-worked environmentally-responsible vineyards with modest expectations through drought, bushfire and flood, for generations.
The Australian wine “industry” is about as smart as the American corn industry, which must over-produce to succeed. There are no fences anymore, no plants, no insects, no shops, no townships, nobody with dirt on their hands. Plenty of petrochemicals; plenty of poison. But no flavour.
Despite earlier gloomy predictions, ABS statistics show the total area of grape vines this year was slightly higher than last year at 166,000 hectares and, with production up, yield rose from 9.3 to 11.8 tonnes per hectare.
See? From whence came that water? Eh?
Winemakers Federation of Australia chief executive Stephen Strachan says it is because of the success of the industry in recent years that so many challenges have arisen.
Exactly. We’re so goddam clever – remember hubris? – that we fucked it completely. Greed comes into mind, too.
"We saw a lot of people come into the industry expecting the phenomenal growth to continue and we've got a job to do to try to keep that market share, rather than continue to grow," he says. "Australia, I think, is now the fourth largest wine producer in the world."
There’s a lot of stuff in that par.
The likes of Strachan talked the business up for years, encouraging increased investment. Every extra tonne of grapes grown in Australia sees the Wine And Brandy Corporation budget swell. The money comes from a levy on tonnes harvested.
Which has nothing to do with market share. Share of what? The biggest wine oversupply in history? The biggest recreational drug racket fiasco ever? Share of what?
The ABS says the total grape crush for the 2007-08 vintage came in at 1.8 million tonnes, up by about 30 per cent on last year, and produced 1.2 billion litres of wine.
Giving us two billion litres of very ordinary plonk to sell into a world market that’s already overflowing.
Australia's largest winemakers accounted for 71 per cent of the total crush, while the smaller winemakers averaged 97 tonnes each. Mr Strachan said although the drought continued to ravage the country, the high quality and size of the 2008 vintage surprised a lot of people.
And delighted those big four companies with the 71 per cent, as their costs were delightfully low. Two of those four, half, of course, are not Australian companies, and you needn’t be a cynic to realise Foster’s won’t be Australian for very much longer.
"It was a very challenging vintage because of the size of it and if we have another vintage of that magnitude, then there is a fairly high likelihood that a significant amount of fruit won't be processed," he said. "The bottom line is there needs to be an adjustment downwards in terms of our vineyard capacity in Australia and that will probably happen at a greater pace now because grape prices are going to be very low this year. From an industry perspective we need to see some vineyards removed so we get back on to more stable footing in terms of sustainability."
Okay, Mr. Strachan, we get your drift. We need to lose a quarter of our vineyards. If you like, I can make available thirty years of tasting notes, with say, two to six thousand wines assessed each year. Let’s say we sort them in ascending order of scores, and tell the producers of the bottom quarter that they obviously don’t know what they’re doing and should simply eff off.
That would provide this industry with its biggest ever international marketing message.
If we also locked in a ratio of water used per dollars profit per tonne of grapes, and native vegetation planted to counterbalance the environmental damage inevitably incurred, that would be another incredible marketing message that would be of enormous assistance in notifying the world that we’ve been leading them in the wrong direction, too.
In fact, their drinkers might even forgive us. People might begin to trust us again.
Mr Henry agrees there is an urgent need for rationalisation and downsizing required within the industry. "But there was little consensus about where and who that corrective measure would come from," he said.
Try my suggestion above, Paul.
And while some might expect a limited amount of water to restrict the number of hectares covered in vines, the corporation reports that the physical availability of water is not likely to be a serious constraint on the size of the 2009 harvest. The ABS says nearly all vineyards in Australia were forced to irrigate this season, bringing the average water consumption to 3.2 megalitres per hectare, with drip and micro spray the most common forms of watering.
So?
"About 65 per cent of all wine grapes are grown in South Australia's Murray Darling Basin and even if drought breaks, the issue is not so much how much rain we have but more so how much irrigation there is," Mr Strachan said. "The river is going to take a number of years to fill up after the drought breaks, so the water outlook is not terribly promising."
Does that mean growers should steal water? How does he know this is a drought and that it will break?
He said federal reform was needed in regards to water trading allowed between irrigators and universal allocations.
Oh. Gotcha. Put him in charge of the River.
Wine consumers are proving to be "unforgivingly Darwinian", says the Australian Wine and Brandy Corporation. The peak industry body says the market place is showing "little or no interest in any attribute other than volume at low cost".
"The most likely effect of the credit crisis is more conservative spending by consumers and gravitation to lower price points," the corporation's information and analysis manager, Lawrie Stanford said. And Mr Strachan agrees.
"We've got a global financial crisis that's leading to either a reduction in demand or consumers trading down to lower priced wines," Mr Strachan said.
Right. Let me think aloud. Forget most of our export. It’s neither profitable nor sustainable. Half the wine Australia drinks is in bladder packs, right? Mothers’ little helper. The silver pillow; the chrome handbag. Then we have, say, Greenock Creek, or Wendouree, which never makes more than fifty tonnes and never sells a bottle below, say $50.
The chrome is begat by chrome. The glittering refineries; the monoculture; the efficiency; the reliability; the science; the University of Adelaide; the salination; the alcoholism; the health costs; the full jails across the outback.
Wendouree is begat by Wendouree: by its hard dirt; its meagre climate; its humble expectations; its honesty with its customers; the way it decided against releasing any wine this year because it wasn’t good enough.
What do these businesses have in common?
Nothing.
So why are they lumped into one big cuddly “wine industry”?
Because the refineries need some modest honesty to ride upon, that’s why. Some quality, some reality, some gastronomic achievement. Some nuts and berries.
With domestic sales dropping by five per cent, Mr Strachan predicted the figure would continue to grow, particularly if the government introduced a tax on all alcoholic beverages in the new year.
I think he means “continue to fall”.
And the tax issue? Easy. Tax all alcoholic beverages on the amount of alcohol they contain.
Combine the resultant effect with that – cheaper, stronger, higher-volume packs will increase in price; winemakers will be encouraged to make wines of lower alcohol – with the results of my culling process above, and you have a happy, sensible, profitable, sustainable business.
Currently undertaking a review of Australia's tax system, and having already introduced a tax on pre-mixed alcoholic drinks, the government says "it is sometimes possible to improve overall welfare by taxing the consumption of particular commodities that cause social harm".
If government didn’t find these geniuses so easy to shove around then the twisted and arcane tax system the industry has already earned itself would never have been imposed in the first place.
As for pre-mixed alcoholic drinks? All the biggest wine companies have them. The wine industry invented them. In the ’sixties and ’seventies they were called Vin Spa or Pineapple Pearl, in the eighties they were West Coast Cooler and the like. Orlando (Pernod-Ricard) even had one called “e”, obviously hoping that a fair few bit of e would be dropped by the kiddies. The wine industry has always been in the business of selling alcohol any way it can. That is its nature.
But Mr Strachan says he is yet to see evidence that wine plays a big part in Australia's problem with alcohol abuse.
Then Mr. Strachan has never stood in the bed of the Todd River with his eyes open. What began with the gun is being finished by complacency.
With the government having signed an agreement with the European Union last week conceding the use of region-specific names such as champagne, Mr Strachan said Australian consumers might also steer away from their favourite drop for a short period once it was given a new classification.
Boo hoo. No more passing off.
He said wine lovers might be frustrated initially due to products formerly known as champagne, port, sherry and tokay being more difficult to locate on bottle shop shelves.
"It's just more a matter of working through a process where people become aware of a different set of descriptors," he said.
Mr Strachan said the new deal conceding the use of European names would mean less constraints on the way wine was made in Australia, allowing it to be more easily exported.
A different set of descriptors? Has Mr. Strachan ever read the claptrap, codswallop and balderdash that’s written on Australian wine bottles?
Mr Strachan said he expected large scale exporters would survive the economic downturn as a result of the deal, but that he was worried how the smaller-scale premium vineyards would fare.
"Consumers tend to trade down in a time of uncertainty, so they still continue to consume as much wine, but they tend to trade down, so those who are selling premium products are going to find the going pretty tough until we work through all the economic uncertainty."
This suits perfectly the perpetrators of the whole racket, right from the beginning. Trade down, and you support the refineries that have buggered the Murray and the Todd, and their inhabitants, you support the mentality of continual oversupply regardless of its effects, and you will need desperately to maintain status quo, with its morality, its experienced players, and its utter, overwhelming destruction. .
AN EXCISE WOULD SEE THE PRICE OF EXPENSIVE WINES LIKE THESE TUMBLE WHILE BLADDER PACKS WOULD DOUBLE. photo LEO DAVIS
WHILE THE TAX WOULD BE A NATIONAL IMPOST, SOUTH AUSTRALIAN PREMIER MICK RAM HAS ONLY DAYS TO MAKE A STAND ON THE EXCISE WHICH HIS FEDERAL COUNTERPARTS ARE CONSIDERING.
HARD LIQUOR PRICES WILL TUMBLE UNDER THE EXCISE PROPOSAL
WINE AND BRANDY CORPORATION BOSS ANDREW CHEESEMAN WAS BRIAN CROSER'S ACCOUNTANT AT PETALUMA
HENRY'S EXCISE WOULD SEE A BLADDER PACK SOAR FROM $14 TO $31, AND THE COLLAPSE OF THE IRRIGATING DISCOUNT WINE BUSINESS, LEAVING A LOT MORE WATER TO RUN DOWN THE MURRAY. GOOLWA IMAGE BELOW BY KATE ELMES.
As for the price of alcopops falling from $3.30 per unit to $2.42, well. At the risk of adding complexity to Mr. Henry’s pristine simplicity, perhaps the excise should be extended in the case of premixed drinks to include an extra charge on sugar and other sweeteners when mixed with alcohol. If caffeine was also included in this kiddylikker, another hike could be imposed. Banning such cocktails is futile: anybody can whup down three or four stiff short blacks between sessions in the boozer.
