Symptomatic Week For OzplonkHunter Vineyards Shrink By Half
Fosters Battles Wine Australia
by PHILIP WHITE
It’s been a symptomatic week in Australian wine.
The biggest end of the Australian wine industry has a long record of ignoring the symptoms of its ailments. This week leaves the callow observer wondering just how crook it’ll let itself get.
First came the news that half the vines in the Hunter Valley have been uprooted in the last eighteen months.
Compared to the Barossa and McLaren Vale, the Hunter has never been a great player, depending historically on fruit from both those regions, and the big rivers, for its bulk products. While its best producers – usually long-term family wineries - can grow and make truly wonderful Semillon and Shiraz, the Hunter’s hardly ideal for viticulture, being sub-tropical, and would probably not be there if there was no Sydney. Nevertheless, the removal of 3250 hectares of vines is a big deal.
In the good old days Max Schubert (right) would flog his horny Rambler coupe – “she’ll sit on 140 MPH”, he’d say with a grin – from Penfolds at Magill to check the vintage at Penfolds’ Dalwood winery in the Hunter. Within years of his death, the Oatleys, founders of the mercurial Rosemount in the Upper Hunter, had raided Southcorp’s Penfolds, and flew regularly the other way in their private jet.
Their audacious 2001 reverse takeover saw Bob “Wild Oats” Oatley (below) paid $1.4 billion - $881 million cash and 94.3 million shares – which swelled beautifully by the time the monolith was “rationalized” and sold to Fosters in 2005.
Fosters soon butchered this prime wine business with further “rationalization”, confusing its management, marketing and sales with its beer sector, an entirely destructive process which it now professes to have successfully reversed in its disentanglement of both sides of the firm for sale.
In ten years it spent AUS$6.7 billion building an empire with a current book value of $3 billion.
Clever operators, the Oatleys. They knew the difference between barley and grapes. And coffee. They made their first fortune running plantations in Papua New Guinea. Of all the coffee-producing countries, it was the closest to the International Date Line, making it easier to influence daily international coffee prices as the sunrise moved west.
Now Rosemount’s iconic Roxburgh Vineyard is part of a coal mine, like an increasing amount of the Hunter. When I visited the region last year, the chopper flew into a thin layer of brown gas the moment we crossed the crest of the Brokenback Range. This was the colour and aroma of hydrogen sulphide, or rotten egg gas, one of the things you tend to get when you scratch open great swathes of lignite and coal shale.
It seems strange that in recent years, the owners of the region’s many thoroughbred studs have complained more loudly about the resultant health of their nags than the locals have about their children.
The coal business is a big employer.
Patriarchal winemaker Murray Tyrrell complained regularly to me about the industrialisation of his beloved Hunter in the ’eighties. At one point he suggested the pollutants in the air were as corrupting of his business as the corruption of the NSW Labor government, and said it was becoming increasingly difficult to fully ripen grapes.
The late Tyrrell (left), “The Mouth Of The Hunter”, once told a gathering of wine writers that with two other prominent Hunter winemakers, he visited Premier Neville Wran, slapped their sugar invoices on the table, and complained that the pollution had become so bad that some years they were forced to illegally chaptalise their wine to get to the point of “ripeness” the market demanded.
Adding sugar to fermenting must is permitted in cold countries like France, but not in Australia, where ripening is sometimes too easily achieved, and acid additions are permitted to bring the wines back into balance.
It says something about the compliant nature of wine criticism that I was the only reporter on that junket who reported Tyrrell’s claim.
Since then, government claims consequent regulations have restricted Hunter pollution, and winemakers say ripening is no longer such a problem.
Newcomers, largely opportunist short-term investors driven by the government’s stupid tax incentives, planted most of the industrial grapeyards which have just been uprooted. If you can stomach their current claims, it is these types of vineyards, and not seriously profitable products like Grange, that keep giant exporters of bottom-end discount plonk, like Fosters, in business.
This leaves the Hunter in the hands of the old families who’ve always been there, stoically growing quality grapes for their old-style wines.
‘‘Fifteen to 20 years ago the dream was to retire from Sydney and live in the Hunter making a wine that was better than Grange and it just hasn’t happened,’’ Tyrrell’s son Bruce (below) said this week.
‘‘There were many vines planted in the wrong place, for the wrong reasons and they will all have to come out.’’
In the same week another small symptom of a huge change: psychologist Karen Hutchison was named NSW Rural Woman of the year at a posh dinner in parliament house. Formerly CEO of the Murrumbidgee Horticulture Council, she currently works for Murrumbidgee Irrigation, which has been responsible for watering enormous vineyards that supply the sorts of wine Fosters exports in shipping containers stuffed with giant bladder packs.
Fair dink. A huge rubber bag is laid into each container, then pumped full of wine which is pumped back out after its voyage.
The current ruin of much of the vast vignoble of the Murray-Darling, through fungal disease and flood in the short-term, and the sudden government-imposed cessation of unsustainable, profligate, environmentally-destructive irrigation in the longer view, must see great reductions in the amount of rock bottom fruit these exporting discounters say they depend upon.
The Hunter diminishing by half is nothing on what’s happening in the Murray-Darling. In the Murrumbidgee catchment alone the draft basin plans irrigation cuts of up to 45 per cent leaving more water to flow into the Murray.
"I've come from the Snowy Mountains, so I've seen first-hand the power of water to build communities and also to change landscapes,” Hutchinson (below) said at her award bash. "I now find myself working in the irrigation industry at a time of fundamental change around water policy so I'm seeing the power of water to both divide communities and galvanise them.”
She has just converted her wine grape vineyards to Sultana production for table grapes.
Which is almost funny. It wasn’t that long ago that highly-irrigated, obscenely high-yielding Sultana was Australia’s most used white wine grape, and Fosters, and the preceding owner/managers of its wine group were amongst its worst addicts. Like, they had to realize that Cabernet franc, watered to crop at 12 tonnes an acre, trucked across two states then bleached, was no longer ideal for making things they called Champagne. At least sultanas are already white - they don’t need bleaching. And you can get forty tonnes of sully to the acre, given enough water.
At the insistence of companies like Fosters, the Murray-Darling growers soon replaced their dual-purpose Sultana with Chardonnay, which yielded just as well, was of a similar quality, and at least had a name you could put on the bottle or bag.
But you couldn’t sell it as food.
Another symptom of panic in the boardrooms is this sudden changing of names. Like Fosters recently rebranded its huge wine group with the name of one of Tony Bilson’s grand old restaurants, Treasury. Constellation took a UAS$1.6 billion dive flogging its Australian business to the investment group Champ, which also delves in mining, media and other industries, and promptly changed the name of its new monster baby to Accolade.
These sound like the names of Korean cars, which is another symptom, given their resale value.
And now that the Australian Wine and Brandy Corporation has become Wine Australia, Foster’s Treasury has had a hissy fit and withdrawn its financial support for Wine Australia’s first big global promo push. Fosters says this campaign, called A+, fails to promote importer's “own labels”. These are the bottom-end Australian plonks exported and flogged under generic labels by supermarkets and the very same giant discounting retailers which have brought the Australian wine business to its knees.
Wine Australia was, in an unusually enlightened manner, attempting to promote the sorts of premium wines that have a home, a winery, a historic reputation, and a profit margin. Sustainable products. Like Grange, and its siblings at Penfolds, which may bear lesser appellations, but in both profit and quality are a serious step above the sort of plonk exported in those big bladders.
Which, incidentally, are bottled by foreign packagers with little of our wine quality control, but ridiculous complexities masquerading as occupational health safeguards.
Could it be that Fosters hasn’t really learned anything?
Or is its spat with Wine Australia a desperate grasp at increasing the value of the discount brands it expects to sell to another Champ in a bulk deal?
And I mean the brands, not the booze. The booze is worth almost nothing. But I suppose that because there’s such an ocean of it still to sell, Fosters’ attempt to outstare Wine Australia could be a last-gasp attempt to flog more grog at any price.
It must realise the Hunter uprooting is miniscule compared to the great vine pull which is working its way down the plagued river systems from the Murrumbidgee and Bourke to Blanchetown and beyond, and that the days are dying when they can pay less than cost price for grapes.
In the meantime, this ongoing devaluation of the once grand Brand Australia is of little consequence to a company which intends to be out of the business the minute it finds its Champ.
That’d leave it with lots of beer, a direct rival of cheap wine.
