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Australian producers rally to stem flood of New Zealand Sauvignon
November 9, 2009
By Guy Woodward
Some of Western Australia's most prominent producers are pooling their resources to combat the ever-increasing popularity of New Zealand Sauvignon Blanc.
Sauvignon Blanc makes up over 80% of New Zealand's wine exports. Half of this goes to Australia.
New Zealand Sauvignon is now the best-selling white wine in Australia – annual exports there have increased 300% in the last three years to 31m litres.
With bumper crops and huge production in both the 2008 and 2009 vintages, prices have been battered down by Australia's two dominant retailers, Coles and Woolworths, and the market is awash with bargain basement versions.
Australian producers – who refer to this flood of wine as the 'Savalanche' – now fear that consumers will shun more expensive domestic versions.
As Michael Hill Smith MW, of Adelaide Hills' Shaw + Smith said, 'Most of these wines are selling at AUS$10. We're trying to sell at AUS$20. We're worried they're going to bugger it up for us.'
It is in Western Australia, though, that concern has led to action.
Jeff Burch, owner of Howard Park in Margaret River, issued a call to arms to his fellow producers, and has rallied support to fund an advertising campaign encouraging consumers to 'drink local'.
Nearly all of the region's top names are on board, including, intriguingly, Houghton, whose owner, Constellation Brands, also owns New Zealand Sauvignon producers Nobilo and Kim Crawford in Marlborough.
Cape Mentelle, sister company of Cloudy Bay, also in Marlborough, has not signed up.
'This won't be a negative campaign, and it won't mention New Zealand Sauvignon directly,' said Burch, who telephoned the editor of The West Australian to ensure the paper's support.
Meanwhile, producers in Marlborough are asking whether the relentless popularity of the category may now be leading to negative connotations.
With prices falling in both the UK and Australia, there is concern that the country's image as a producer of more premium wines will be harmed.
'Reducing the price of New Zealand Sauvignon isn't sustainable,' said George Fistonich of Villa Maria.
'Growers have seen the price drop and the damage it's doing, and now they've started focusing on quality and concentration to preserve the price points we already had.'
Guy Woodward's blog from his two-week tour of Australia, on this topic and more
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