Halliday’s industry predictions, troublesome dollar

Halliday Top 100

There is no doubting James Halliday is still the top of the wine writing tree in Australia. His annual Wine Compendium and Top 100 published in The Australian remain the most influential guides for consumers.

I read both and can’t disagree with any of the wines he picks. But then I don’t disagree with any reviews that others write. Of more interest to TKR is a writer’s opinion of the industry and where it is going. I often disagree with these statements or see the issues from a different perspective.

The 2016 Top 100 was published recently. In the introduction Halliday says it has been 12 months of highs. He writes:

“It’s been quite a year, with a frantic 2016 vintage in the eastern states that had all varieties ripening early and seemingly at the same time.”

Halliday says that was just one highlight, with others including Casella buying what he calls “upmarket acquisitions” and the Chinese market for Australian wine. Halliday says this will grow in importance over the coming years. He’s not wrong. But how Australian producers treat (and not abuse) the market is what will really make it work.

This was an interesting sentence:

The backdrop to the year was the moral panic of climate change and its pollutant-in-chief, CO2.”

Moral panic? TKR observes, indeed shares, concern but has never witnessed panic. The climate is changing and some panic regarding man’s contribution would be welcomed.

For the future, Halliday predicts improved quality for Australia’s best wines and reduced costs through the use of sophisticated machinery.

Australia has so many good/great wines. It must be a nightmare to pick just 100 and rate them as top. It’s something Halliday admits:

“The record number of wines entered this year increased my hand-wringing as I sought to make choices between wines of near-identical entitlement.

“The selection process may seem to lack transparency or consistency, but it’s a long journey that takes into the account value for money as a starting point. It’s not just the points (as it is in a wine show); the price is very nearly as important.

“Then there is the need to balance the number of wines in the varietal group: shiraz and chardonnay respectively could provide enough selections for the total of 80 wines in the table wine quadrant if I didn’t intervene.

“But it doesn’t stop there. Rosés and pinot noirs under $25 more often than not don’t put pressure on the scoreboard. This year they did; moreover, the three pinots were $20 or $16. These, and the four pinots in the over $25 segment, point to the happy place pinot noir is in.”

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Tasmania and Western Australia doing very well considering their small production. A telling sign that Tasmania is becoming the place for sparkling wine was reinforced with six of its nine wines being sparkling.

It’s puzzling that Halliday includes champagne in the top 100. If champagne why not wine from Bordeaux or California? He is a very busy man so maybe there are time constraints.  Perhaps TKR should start the top 100 imported wines!

Swings and roundabout

An article in The Australian 23 November by Eli Greenblat shows the Swings and roundabouts of foreign exchange. Greenblat starts by saying Australian wineries have enjoyed an export bonanza part of the reason is the falling Australian dollar. True it has dropped in the past two years From 81.27 on 2 January 2015 to 74.27 on 23 November.

The crucial 12 months for the wine companies would be the financial year. On 1 July 2015 the rate was 77.13 at the end of the financial year 30 June it was 74.27. Its low points during 2015/16 was 20 January 2016 at 68.67 the high was a year earlier 12 January 2015 82.44.

Counteracting the dollar is the downfall of sterling on 2 January 2015 it was 53.72 in May 2016 after the Brexit vote it started its fall in October it was over 60 but it dipped below 60 in November and was 59.81 on 23 November.

Greenblat also published some medium wine company’s sales

  • Tahbilk sales $12.344 million, profit $1.16 million
  • Taylors Wines sales $66.578 million, profit $4.918 million
  • Brown Brothers, sales $92.17 million profit $8.643 million

It’s looking as if the swings will continue to swing and the roundabouts continue to turn, what the next 12 months bring is hard to predict.

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