Australians see silver lining in import surge
- Monday 30 January 2012
Christensen: Imports 'not a tough call to make'
A combination of a strong Australian dollar and aggressive discounting by Australian supermarkets has led to a drop in the price of European wines, and a surge in imports.
Since 2007 wine import volumes have risen from some 6% of total wine consumption to around 16%, while French wine imports have gone up by 58%. The strong dollar has also caused export volumes to fall. Treasury Wine Estates, owner of Lindemans and Penfolds, reported sales in the United States fell by 15% in the first half of 2011.
As Sam Clarke, managing director of Barossa producer Thorn Clarke told Decanter.com, ‘It’s a double whammy: exports have been hit hard and imports are up.’
Clarke blamed part of the problem on the boom years, when ‘some people went into the wine business with their eyes half-closed. Now we have too many wineries with negative equity – in Barossa vineyard values are down 40%.’
Prices of European wines have plummeted, in some cases by 30%, with Moet & Chandon Champagne selling for less than the Yarra Valley-produced Domaine Chandon, AOC Bordeaux selling for around AU$20-30, and high-end wines from Tuscany and Rioja selling for the same price as top-flight Australian wines.
Coles and Woolworths, both major wine retailers, are now importing their own wines, thereby cutting costs and able to reduce prices still further.
The situation caused one Wine Australia spokesman to demand – jokingly – that any Australian caught drinking foreign wine ‘should have his strides pulled down’.
Professionals at the Australia Day tastings in London yesterday did not agree the situation is wholly pessimistic, however.
Troy Christensen, CEO of Accolade, told Decanter.com that it was ‘utterly silly to suggest it’s an Australian’s patriotic duty not to buy imports’ and pointed out that if imported sparkling wine was being drunk, ‘Australia makes a significant amount of sparkling wine, and it’s a great thing that they are getting interested in sparkling whether it’s French or Australian.’
His views were echoed by Corey Ryan, group chief winemaker at McWilliam's.
‘Imports have never had it so good. I can see the attraction of it to consumers, who now see buying imported wines as an option. It’s not a bad thing from a winemaker’s point of view: the more Rioja consumers drink the more they educate their palates, and Australia has lots of Tempranillo.’
Others at the tasting mentioned the word ‘xenophobia’ in connection with Australians’ antipathy towards imports, and suggested trying to control the import of wine was like trying to stem the tide.
Paul Schaafsma of Australian Vintage said, ‘It’s not a problem. It’s inevitable – you can’t hold back imports.’
As Christensen said, ‘Tasmania makes some excellent sparkling at AU$50, but if you have Moet coming in at AU$30? It’s not a tough call to make.’