THUS SPRACH THE LORD

Tony Lord photographed in Chesser Cellars by Philip White 1982

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by PHILIP WHITE - Interview in WINESTATE July 1982

Tony Lord is the editor of the prestigious British wine magazine, Decanter. In Australia recently, on his way home from New Zealand, Lord delivered some scathing criticisms on the way Australian wine marketing is conducted abroad, especially in London itself.

Lord believes that since the Australian Wine and Brandy Corporation closed the Australian Wine Centre in London, an invaluable twenty years of effort in promoting Australian wines there has been almost entirely wasted.

Pointing out that the number of cases of Australian wine imported into Britain escalated steadily from 11,000 in 1977/78, to 48,000 cases in 79/80, Lord is particularly reproachful of the fact that this figure dropped to 33,000 cases in 80/81, neatly comparing the situation to the number of Californian cases imported: that figure has jumped from 40,000 cases to 400,000 in two years.

Explaining that the established European wine producers are almost operating at their maximum production levels, with very little room for expansion, Lord believes these suppliers have little choice other than to charge higher prices for their shrinking market share, and is adamant that the gap will be filled by wines from the New World countries, like Australia, California, South Africa and New Zealand.

However, Lord explains, Australia, unlike the others, appears now to be disproportionately focusing its attention on the much more difficult markets of the USA and Canada, both areas requiring relatively massive investments for the slightest market share.

A jovial expatriate Australian, Lord displayed a rare and irreverent candour when confronted with the Winestate microphone, and fairly large chunks of his dissertation proved far too spicy for these pages. A pity, but there’s plenty here:

Will we have to send our best wine to Britain to establish a market?

It’s always better to start at the top and work down, but given the quality of the wine selling there now, the wines like the ones Yalumba are shipping are very good flagbearers.

If you look at what’s happening in Australia at the moment, you’ve got a glut of wine and you’ve got price discounting. Everybody’s moaning about there being no profitability in wine, but those companies that are exporting are making money. Any company that’s built up a substantial export base, even on a modest scale, at least they’re getting some reasonable profitability with their wines, which may help the subsidise the furtherance of what they’re doing.

I was talking to Max Lake the other day, and he’s firmly committed to exports, and he said ‘It might be that I do have to cut down the amount of wine that I release in Australia’, but, he said, ‘I just can’t rely on the Australian market for my livelihood if we’re starting to get these price discounting problems with people undercutting and stuff selling for a buck a bottle’.

All the smart people in this industry are the ones who are exporting. In the future, and I’m certain that in the not-too-distant future, there’ll be a huge wine glut in this country again, and in the next minute we’ll see Boeings full of Ockers coming over to London and trying to offload what they’ve got in their warehouses, with little regard for the poor bloody importer who wants continuity of supply, and this time the people in Britain certainly already know what they can expect. They’re not gonna touch these guys with a bargepole. But they will go for the companies like Yalumba and Rothbury and Petaluma, and those companies that have been in Britain for five or six years, and all release a certain quantity of wine to that market each year.

See, that’s very important. The poor bloody importer. I just heard the other day about two companies from Australia that have been exporting to Britain and have decided not to send them any more wine. They’re getting top dollar over here, but when they’re not getting top dollar, they’ll be back over there, and that’s stupid short-sightedness. It really is.

Is there any way around the problem of trying to attack a big market like that with four or five pallets of cabernet?

If the maker finds a good importer and he’s prepared to say ‘Yes, I’ll let you have a thousand cases each year”, and if they’re honest about it ... you see Whitey there’s far more possibility for consistency here because of the climate, if for no other reason.

If the importer gets a duff one, he’s gonna make a decision what he’s gonna do about it. The first and foremost problem is that most of the poor buggers who are in London trying to sell Australian wines – and there are some of them who are putting far more effort into it than their profitability would ever justify – what they want to know is that they are going to get wine. I mean, one of the people who have pulled out rang up the UK importer and said ‘Look I can’t let you have any wine for the next two years’. Well now, what is the importer expected to say? He’d been building this thing up, and he’d had the winemaker over. He’d been holding lunches. He’d been getting press coverage, and then he gets this telephone call. He only wanted two or three hundred cases!

But you need about two or three thousand cases there to start with, to make any sense in terms of profitability, and there are very few wineries here that are even prepared to let an export market have that much wine. And they’re silly. The Californians will let you have as much as you want. They realise what the future is! The South Africans will let you have as much as you want.

The New Zealand industry thinks far better about the future than the bloody Australians!

See what they don’t realise is that London’s a prestige market. The Californians aren’t there to make a noticeable profit within five years. It’s a prestige market. They’ve got to see you represented. Every decent wine merchant in the world goes to London, if only because it’s the stop-off before you go to France. But they see your wine, you’re talked about, and the West Germans feed off it, the Belg feed off it, the Scandinavians feed off it, and the Dutch feed off it. And it’s a very big deal to be there.

The north-west Americans feed off it very heavily, too. But the Australians have got tunnel vision. And this is where I ... well, for a highly-placed person in an Australian wine corporation to say, effectively, that Poms wouldn’t know a good bottle if it hit them over the head, is just the end. If they think it privately, keep it to themselves but you don’t go saying it where it’s going to be quoted back at you in an influential trade publication. If the wombat’s doing these things, you bury him in a very large hole!

There are no marketing skills within the industry that apply to the international market that I’ve ever seen. If you’re dealing with Canada, you must have somebody who understands that market. If you’re dealing with America, you’re dealing with a totally different market, and you need somebody who understands that market. And ditto for Germany and the UK. But what we have here is a Coca-Cola salesman who goes around and thinks he can apply Australian marketing techniques in four totally disparate markets. And what he’s doing is – they open the door and they see this turkey coming from ’way back.

There’s an advertising agency in Toronto who are I bet are still laughing at the rip-off they got over Kelvin the Koala. Jesus, they must be bloody in hysterics! “Half a million in your pocket? Great, we can do you a beaut one!’ And, of course, what everybody forgot was by putting this French-speaking koala on the market was that they immediately alienated all the English-speaking Canadians who thought they had a strong bond with Australia through the old Commonwealth. And I mean that’s just a fundamental marketing mistake.

If they can’t see such elementary mistakes, God knows what happens when they get down to the fine print with dealing with these Americans who are so bloody sharp that they’ll eat you before breakfast. In fact, that’s probably when they got this bastard, before breakfast, and tied him up then. You know, while he was still half asleep. They’ve all had a jog and a shower and a jacuzzi and a screw and they’re into the office at seven-thirty in the morning, bouncing and raring to go.

You know me, and any Pom I know, we stagger and say ‘Jeez, I need a glass of good bloody Champagne!’ And you know, these Americans: ‘While you’re signing the documents we’ll open the Deutz, Sir’.

What do people in Britain look for on an Australian wine label?

Well, the varietal name. Area definition, and perhaps a little back label information about the product. It’s getting to the point now with these bloody EEC bureaucrats that by the time you’ve got all the crap that they want on the label, you’re lucky to be able to fit the producer’s name.

Fundamentally, what they want is attractive labelling, and like every other market, there’s just ... well you take a Wolf Blass label. There’s eye-catching shelf appeal, with the varietal name, and the area information, and the vintage. Varietal name and vintage are the key things at the moment because they imply immediately that this wine is quality wine.

It doesn’t necessarily follow-through in the bottle, but, at the moment, anything that hasn’t got a vintage date or a varietal name in Britain is considered real cheapo junk.

But what about an indication of style?

There’s a fine balance in Britain now. You’ll find that, say compared to ten years ago, there’s far more descriptive stuff on labels. “Dry red’, ‘medium white’: very much more indication to tell the consumer what’s inside. People make automatic assumptions in Britain now that if they buy cabernet they expect a certain style of wine. 99.9% of the time they’ll get it. But if it’s a blended wine, like say cabernet-shiraz, you can do that on the back label. But the only thing you don’t want to happen is to go to the California extreme where they literally tell you what socks the winemaker was wearing when he made the wine. I think that’s the sign of a fairly unsophisticated wine-drinking market.

The primary considerations must be shelf-appeal. Eye-catching visual stuff. The South Africans, say, might just call it ‘premium dry red’. We’re not allowed to use the pejorative name in England, but you can in some other markets. You know, in Belfast the soldiers think it’s a good day if they get hit on the head by a bottle that says ‘premium’.

What about the state of Australian wine writing?

I think the wine writers here pussyfoot around a bit too much. There should be much more criticism, because no industry’s going to really top if it’s not criticised, and if it’s not criticised constructively.

There’s this stupid Australian insularity problem. Australians know they’re making good wine. Some of them mistakenly think they’re making brilliant wine. There’s a person I went to university with who’s now a winemaker, and he’s going to charge $14 a bottle for his next release of cabernet sauvignon. Now, this guy’s a doctor. Well, he’s a butcher at medicine, and his winemaking’s even more execrable.

Now it’s awkward. I’m a magazine editor, like you, and we’ve been criticised because we don’t mention bad wines. But a newspaper journalist who has no problem with that sort of thing can come out and say ‘Look, this wine’s been released at $14 but in my humble opinion it’s just not worth the money ... I went down to Chesser Cellars and bought a bottle of Lindeman’s riesling as well as a bottle of so-and-so for under $14 and I think the money was better spent’.

They can’t do anything about that.

What can we, as an industry, do to correct some of these problems?

I’d like to see a lot more of the Wine Board bringing down good journalists and good people from around the world, who know what they’re talking about when they’re talking about wine. More scribes and trade people from different countries. You know, you should be saying ‘OK, the biggest wine buyer from the biggest wine chain in Germany is coming to town, and if anyone in the trade wants to come and meet him for lunch, come along, because he’s going to talk about how to sell wine in Germany’. That’s the sort of thing you should be doing more of, instead of giving your boys first class air tickets to go and whoop it up in the ritziest hotel in New York, wasting growers’ money, when they bloody well need it back here.

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GOTCHA! From The University's Own Paper

Vice-Chancellor Professor Mary O'Kane pictured at Glenthorne with the Chairman of the Friends of Glenthorne, Peter Smytherman. Photo: John Drislane.

Vineyard planned in Glenthorne Farm handover

From Adelaidean - Volume 10 Number 6 - News from Adelaide University - July 2001

GLENTHORNE Farm — the former CSIRO property at O’Halloran Hill in Adelaide’s southern suburbs — is being handed over to Adelaide University by the State Government for use as a vineyard and wine research facility.

The 200 hectare property was bought by the State Government from the Commonwealth in 1998 after it had been vacated by the CSIRO’s Division of Health and Human Nutrition.

Welcoming the decision, Adelaide University’s Vice-Chancellor, Professor Mary O’Kane, said the University had agreed to establish a commercial vineyard at Glenthorne in partnership with BRL Hardy.

“The partnership agreement between the University and BRL Hardy—two of the icons of the South Australian wine industry—will strengthen South Australia’s position as an international leader in wine research and education,” she said.

“This is a strategic, long-term investment based on sound financial principles and an assessment of the future needs of the Australian wine industry.

“In addition to state-of-the-art laboratories and equipment at the Waite campus, the University will now have access to a large commercial vineyard managed by one of the world’s fastest-growing wine companies. This will be a tremendous advantage in ensuring that the University and the South Australian wine industry stay at the forefront of viticulture and oenology research and education.”

Professor O’Kane said most of the land would be put under vines and some research facilities would also be located on the site.

The commercial vineyard would contribute further money for research at the University.

“We expect that the vineyard will begin to generate income for research from the third vintage,” Professor O’Kane said.

“We have entered into a long-term contract with BRL Hardy for the management of the vineyard and sale of the fruit, more than 50% of which will be available to other winemakers.”

Mr Angus Kennedy, BRL Hardy’s Operational and Technical Director, said the vineyard development would benefit the entire South Australian wine industry.

“This initiative is effective in that a number of parties will benefit from the project over a number of years. We are looking forward to working closely with Adelaide University for the betterment of the South Australian wine industry,” he said.

Professor O’Kane commended the State Government, the Commonwealth and the CSIRO on working together to produce an agreement on Glenthorne Farm that would deliver long-term economic benefits to the State.

She also paid tribute to the University’s Deputy Chancellor, vigneron and Executive Chairman of Petaluma Ltd, Mr Brian Croser, for his role in negotiating a new future for Glenthorne.

Professor O’Kane said the University was aware of local residents’ concerns about the future of the property and would be consulting with them about the vineyard plans.

“We are seeking planning approval for the vineyard, which will include an extensive buffer zone around the site,” she said.

“We will be working closely with BRL Hardy to minimise noise and inconvenience to the local community. BRL Hardy has extensive experience in developing and operating vineyards in an urban environment, and we will be making available the University’s full research resources to ensure responsible environmental management of the site.”

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Take Some Essence Of Oak Chips, Add Weeds And Vanilla ...

by PHILIP WHITE - This first appeared in The Independent Weekly in May 2008

“Chardonnay will be the vanilla of the Australian wine industry”, the late Len Evans, OBE, preached for thirty years.

Who? This feisty ex-Mt Isa Mines storeman eventually ran Rothbury Estate, owned Evans Family Wines, chaired Petaluma, controlled the national wine show ring, became a highly influential mentor to hundreds of adoring winemakers and critics, et al. Like Sir John Falstaff, Evans smudged the boundary between ebullient and bumptious, and, after port, was borborygmic.

In Champagne, chardonnay’s used for champagne; in Chablis it makes lean, unoaked chablis, and in Burgundy, it’s used to make creamy, extravagantly oaked white burgundy. Like chardonnay, all these words sound nice, and while it was all fabulously expensive, fabulist Len loved shunning expense at the table.

But it snows in those places. Apart from bits of Tassie, like the Upper Tamar, and tiny slices of the mainland - high Orange or Tumbarumba - we could never grow chardonnay vaguely like the great French vignobles. So why chardonnay? It doesn’t snow along the Murray. Then, Len never drank much Murray.

Locally, Romney Park proves that on one tiny ridge near Hahndorf, you can make delicious chardonnay, as Ashton Hills does near Summertown. Penfolds makes mighty stuff from other Hills vineyards. Mountadam’s returning from a ten year slump. There’s Evans’ ex-pet, Lion Nathan’s Petaluma, with its alluring bunch of Riverland doradillo on the front label. After that I’m scratching.

Scarce cool country is not the only problem with Australian chardonnay. From the start, back labels invariably claimed this new variety was lovingly fermented and matured in new French oak, oak being the only thing available to legally impart vanillin. But as I wrote in 1991, when Len’s sermon was reaching crescendo, France typically harvested enough oak to make only about 250,000 new barrels – about 800,000 short of the amount of Burgundy-sized barrels needed to contain the juice of our 20,000 freshly-planted hectares of chardonnay. If indeed they eventually grew a berry. Forget barrels for the reds, or for the rest of the world. Or for the French, for that matter.

Luckily, Len had an attitude to oak that didn’t always require barrels. At a tasting at Rothbury in May 1983, I sidled out for a smoke when a courier arrived with four large plastic drums of liquid. Rather than interrupt my host, who was inside preaching, I signed for it, then read the chit, which said “Essence Of Oak Chips”. That’s cheaper than chips!

Evans’ acolytes and disciples always rather contentiously insisted that the customer demand for chardonnay was insatiable. Only a few years back blokes like Phil Laffer and Stephen Millar, bosses of Pernod-Ricard/Orlando/Jacob’s Creek and Constellation’s BRL-Hardy, were urging more plantings.

As these come into production, we now have 32,151 hectares, mostly in the wrong places. We might as well irrigate weeds. Constellation’s retreating from the River, and Fosters and Pernod Ricard have just told growers there that demand for the vanilla of Australia is plummeting. So the punter is not a mug.

Chardonnay’s not dead: Penfolds paid $5000 a tonne this year for cool district grapes for its top example, the Yattarna, and Chablis and Burgundy sales are soaring. Champagne’s so popular they’ve just made the district bigger. But while their new price for River chardonnay, $300 a tonne, might be rather fortuitous for the transnational winemakers, it won’t cover the grower’s costs.

One of the world’s oldest wine merchants, Berry Brothers and Rudd, last week released a report suggesting the Murray-Darling will soon be too hot for fine wine production, and - surprise, surprise - that the future lies in expensive luxuries from cool places like Tassie. This was timed to lob explosively in the middle of the London Wine Trade Fair.

Even more practically destructive was the CSIRO’s announcement that our own Rudd’s budgetry idiocy will close the vital Murray Valley viticulture research establishment, just when Stephen Strachan, boss of the Winemakers’ Federation, was busy reassuring everyone that “the industry’s doing a lot of research around climate change”.

The poor old River couldn’t take deadlier hits below the waterline. Alley juice for our bladder packs is already coming from third world vineyards where wages are miniscule and environmental controls non-existent; now our bottom-end bottles are threatened.

As for Berry Brothers and Rudd’s forecast that China will be the world’s major wine supplier in fifty years? Anyone who’s believed my musings since Remi Martin helped China plant its Dynasty vineyard - in a place where it snows - way back when Len began his vanilla sermon, would have to agree that the real number’s now about ten years.

I don’t gloat over the agonies of the gullible and unfortunate, but it’s becoming increasingly tempting to say “I told you so”. If only the Chinese had planted chardonnay and oak, Australia could have avoided much terrible grief. And saved quite a lot of water.

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Bolt-on acquisitions in the sector

by PHILIP WHITE - This was first published in The Independent Weekly in DECEMBER 2007

The Oz last week gave a big slab of its business pages to brewer Lion Nathan's CEO Rob Murray. He'd overseen an increase in his company's operating and net profit figures. "Solid" he called it, whilst warning that aluminium (containers) and sugar (contents) were increasing in price, and the drought was sending the cost of barley boonta.

Rob plans to counterattack with a $40 million hike in his marketing spend, and attack "the younger market" with more "ready-to-drink pre-mixed products". He's also steering Lion Nathan into the rum market with the purchase of the sacred Inner Circle, and you'll see their McKenna bourbon everywhere by Jesus' birthday.

"Lion's wine business" wrote The Australian's Blair Speedy, "which includes such premium brands as Petaluma, Wither Hills and Stonier, booked operating earnings of $6.7 million, up 26.4 per cent." We may parochially add Knappstein, St Hallett and Tatachilla to that list. (Eastern scribes also tend to fail to mention what Lion failed to buy - it didn't even end up owning the driveway to its Petaluma winery.)

But the increase in the barley bill will absorb all those wine earnings this year. And if it doesn't rain with abnormal fervour for most of the year, next year's hike will be $9 mllion. And so on.

Without mentioning what the drought will do to the cost of grapes, Speedy added that while Lion had bought its "wine assets" at the top of the cycle, Rob had no intention of "compounding the error by selling them when the industry was in slump. Accordingly, Lion was still looking for bolt-on acquisitions in the sector."

So, Petaluma. Part of an error? Not such a suite of Vineyards of Distinction? St Hallett? Knappstein? Bolt-on acquisitions in the sector?

Whether Rob Murray uttered these words or not, language like this, and the business philosophies it indicates, is all too cheap and flash, especially as the wine industry councils are finally discovering, and proclaiming, that it's time the wine business got down to making some profits through improved quality, higher intelligence, better attention to wine's gastronomic aspects, and better education of the market.

Given the years those companies spent promoting their distinction, their quality, their terroir and their lure, could they all end up coming from the Knappstein winery, like the myriad brands that exude from Fosters at Nuri? You watch.

Further down the slide, the water crisis daily exposes more terrible truths about the vulnerability of the highly-irrigated discount wine business, and while it's been about twenty years too late, the industry's new twenty year plan makes it clear we should be thinking quite a lot more profit, with less feverish concentration on the sickening downward gurgle of the discount bins of the Old World. Less water; more money.

But the old acquire-and-dilute mentality persists. Southern brewers envy the success and quality of premium European beers. They take over their distribution, then buy their manufacturing rights, and make them here, or in Asia. Fosters, for example, is about to do Carlsberg and Elephant. Lion imports Heinecken and Becks from Asian breweries. These licensed brews eventually cease convincing the cogniscenti that they're as good as the original beers, sold fresh from their home breweries, full of wholesome local ingredients. Examples? Peroni is delicious right now, as is the bright Trumer Pils.

While Lion Nathan is not in the silver pillow business, its determined plunge into kiddylikker could take a more enlightened start. Why bother attempting to put real whisky, gin, vodka, or Coke in RTDs? Why insist on the cheapest bags and bottles having grapes in them? Why not get into the lab with a team of cunning industrial chemists and design a range of new confected drinks that covers the flavour range of the whole damned bottle-o, just go somewhere and manufacture them. Turn off the irrigation, leave the old arid land behind, go to where the sugar grows and the rain falls, and release a set of bright young bevvies at prices and profits that will set the world reeling? Put vitamins and minerals in them, instead of caffeine.

Forget the irrigation, the Mallee, the grapes.

They might even be able to do away with barley.

Now there's a bolt-on acquisition for the sector.