Brexit confusion & Morris debacle, farewell Hick

Brexit isn’t the half of it

Those who have a Facebook connection with me will be aware I am not in favour of the UK leaving Europe (Brexit). That aside, as I made clear in my Facebook post, we follow the democratic rule and those in favour of leaving won.

For those who pointed out “over half the UK voted to leave”, they didn’t. The UK population is 65.1 million, of which 46.5 million people were entitled to vote, and 72.2 per cent of that figure voted. This means 27.8 per cent didn’t bother to get their lazy arses to the polling station. Of those who did vote, 51.9 per cent voted to leave and 48.1 per cent wanted to remain. It’s a slim margin and it’s been estimated that if 16- and 17-year-olds had been allowed to vote it would have gone a different way.

There are many arguments for and against Brexit, but this is not the best place to argue them. The question is: how will it affect Australian wine in the UK? Possibly not at all, but the pound has fallen and if that continues it will play some part down the track. A falling pound could also affect tourism from the UK, which in turn would affect wine via cellar door visits and restaurant sales.

Share prices have also tumbled. Treasury Wine Estates hit a high of $10.51 on May 30 but was $9.13 at close of play on June 28. The Aus-US dollar exchange also fluctuated, but not a great deal and seems to be stabilising this week.

Maybe a bigger concern is Australia not having a free trade agreement (FTA) with the UK. We started the process of negotiating an FTA with the EU last November.

I have no doubt there will be changes because of Brexit. What I hope and meditate about is that they are for the better, and not, as I fear, for the worse. How they will affect wine and Australian-UK trade overall we will have to wait and see.

Worth reading and I urge you to do so is a briefing note on the Winemakers Federation website, go here  

Morris minor

Is Morris Wines just too minor for Pernod Ricard (PR)? This week PR announced it was to close the winemaking and cellar door at Rutherglen-based Morris Wines and place them, along with vineyards, on the market.

It’s not the first time the mighty PR has tried to offload Morris, which was on the market for several years previously, but either a buyer couldn’t be found or there wasn’t one prepared to pay whatever the asking price was.

PR is getting rid of the vineyards, winery and cellar door but keeping the brand. What is the logic in this? Does the brand hold a lot of value to PR? I doubt it does, but it would to a purchaser and it would gall PR to see someone else make a success of Morris.

I think it shameful that a company as large as PR is prepared to see a brand such as Morris die because of its own insecurity. Be big, act adult, let the brand go with the winery and vineyards.

The company cites declining interest in fortified wine as the main reason for the disposal. There’s no doubting the truth in that, but there is fortified and fortified, and Morris wines are at the top of the quality ladder. Look what Accolade Wines is doing with Hardys fortified wines. If PR really tried it could restart a trend.

I believe the reason is more to do with lack of focus. Morris was far from a priority brand in the PR portfolio and probably suffered from lack of distribution and promotion. The question being: why put it on the market now?

Perhaps PR thinks the Morris assets will be attractive to Chinese investment. Perhaps another Rutherglen winery will want to acquire vineyards and stock, but I doubt it would want the winery and cellar door. Maybe a group of export-minded Australians could, with Chinese partnership, rejuvenate the fortified sector and captivate the Chinese market. I await further developments.

Farewell Mr Hickin

It’s the week to farewell Bernard Hickin, chief winemaker at Jacob’s Creek. After 40 years moving up the company ladder, Bernard is handing over to Ben Bryant. TKR looks forward to having as good and rewarding a relationship with Ben as we have had with Bernard.

I was privileged to be one of 250 people around the world to receive a bottle of the Limited Edition Jacob’s Creek South Australian Shiraz Cabernet 2010, released as a tribute to Hickin. I won’t review this wine. I have read other reviews and they are positive and good. I will drink this wine, along with other quality wines, at a special dinner yet to be decided, and then, Mr Hickin, I will raise a toast to you. Enjoy retirement and if you’re ever heading Byron way get in touch.

Having partly recovered from the trauma of Brexit I now have the drama of the Australian general election to look forward to. Should I survive, TKR will be here next week. Enjoy your vote.

Tony

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