Japan and Korea markets show promice

Turning Japanese

Wine Australia is congratulating itself on wine tastings held in Seoul and Tokyo. It says almost 900 guests in total attended the two events.

Japan was 10th on the export table for the year ending June 30, with a value of $44.71 million (up 3.5 per cent) and 9th in volume with 11.63 million litres (down 3.4 per cent).

Bottled wine exports accounted for $37.06 million of the total. The price-per-litre table makes interesting reading:

<$2.49 litre $2.50-$4.99 $5-$7.49 $7.50-$9.99 $10-$19.99 $20-$49.99 $50>
$304,000 $18,610,000 $4,874,000 $4,678,000 $5,765,000 $2,162,000 $672,000
Down 12% Up 11% Down 8% Up 13% Up 41% Up 12% Down 28%

It looks good to see the under-$2.49 amount reduced, and it could be considered bad to see a reduction in the $5-$7.49 litre sector. But look at the preceding $2.50-$4.99 sector. More so, the following three sectors all up double digits. Nor should there be great disappointment in the $50-plus sector, as this sector is prone to some big fluctuations.

The volume table:

<$2.49 litre $2.50-$4.99 $5-$7.49 $7.50-$9.99 $10-$1999 $20-$49.99 $50>
142,000L 5,000,000L 823,000L 540,000L 431,000L 75,000L 8000L
Down 6% Up 8% Down 5% Up 14% Up 44% Up 10% Down 24%

Bulk wine totalled 2.53 million litres, down 26.9 per cent. Out of that total, 1.81 million litres (down 25 per cent) were in the price bracket 50 cents to $1 a litre. The average price of all wine shipped in bulk globally was 97 cents a litre.

South Korea is a different story to Japan. To start with, it’s not in the top 20 export destinations. Total imports of Australian wine amounted to $12.73 million.

Bottled wine accounted for $12.13 million. The presentation of the figures is different to those for Japan.

Bottled wine exports in price sectors:

<$2.49 litre $2.50-$4.99 $5-$7.49 $7.50-$9.99 $10>
2015-16 N/A $1,218,456 $1,487,329 $3,344,735 $5,554,574
2014-15 N/A $537,228 $3,055,838 $1,440,808 $614,764

 

There was no wine shipped in the bottom sector but the increase in the $2.50-$4.99 was impressive. The drop in the next sector was dramatic and would be a worry, but was counteracted by the $7.50-$9.99 sector, and the $10-plus has rocketed.

Both are small markets compared to the UK, US and China, but appear to be worth considering.

Populist whingeing

An article by Cameron England, business editor of the Adelaide Advertiser, on September 12, was, in TKR’s opinion, populist whingeing.

How can Australian wine advance and become adult if petty whingeing continues to hold it back? England starts his article with a list of wine brand names owned by Coles or Woolworths. He also mentions, “70 per cent of what they call ‘off premise’ wine sales but what you and I know as buying from a bottle shop”.

He goes on:

“Most of these wines you’ll find at a pretty attractive price point, coming in at between 10 and 15 bucks. Many of them aren’t too bad, some are pretty good.”

The issue, according to England, is:

“They’re squeezing out the numerous small winemakers who’d love to have access to the millions of people who stroll the aisles of the big liquor stores each week browsing for a new bottle to try.”

Take out the own brands and give the space to small winemakers? England needs to grow up. As the business editor he must know the economics of fast-moving goods versus the movement of twice or three times the price artisan wines is an equation that simply doesn’t work.

He continues with tired old rhetoric about feathering the nests of the big two supermarket chains. He also bemoans the dominance of the large producers.

The situation is what it is: Coles and Woolworths are the largest retailers and between them stock a huge range of smaller producers. Has he not considered there simply isn’t that much room in a store? Has he considered modern sales patterns, such as selling direct to consumers and small wineries taking on the responsibility of selling their wines, not just making them?

There is also the export market. The domestic market is chock-a-block with wine. Small wineries have to find their niche, and it may not be Sydney or Melbourne. The last time I was in Adelaide, the capital of Australian wine, I noted numerous New Zealand sauvignon blancs on wine lists. If the people of Adelaide fail to support their local wines, what justification has England for getting stuck into retailers?

England concedes that large wine companies and retailers employ thousands of South Australians, but then returns to the plight of the small producer. TKR does generally support the small in their battles against the large, but we know the answer is in the small guys helping themselves.

England recommends consumers should:

“Seek out your local, independently owned bottle shop, and have a yarn to the person behind the counter, or the winemaker pouring a few on a Friday or Saturday afternoon.”

The point he doesn’t address, and the one that brings his jingoistic article crashing down, is price. The consumer is budgeting $12-$15 a bottle. The artisan winemaker pouring wine in a local store on a Friday or Saturday is often offering wine at $20-plus.

White and black

While Cameron England is playing to crowd sentiment in the ’Tizer, Philip White has an article in the InDaily. White covers the misdeeds that have taken place over the past few decades in the Australian wine industry. Under the heading “How to make water into wine”, he says:

“My first encounter with shady wine stuff was at Len Evans’s Rothbury winery in the early ’80s, when I witnessed the delivery of enough essence of oak chips to make a great volume of chardonnay taste a bit like it was barrel-aged… 

“A wine tanker driver showed me his log book in the top pub at Truro. He had fastidiously recorded deliveries, to some very famous wineries indeed, of apple juice from a hail-damaged Victorian crop…

“A decade later I was sent an email from a closed class-only University of Davis California web forum, in which two visiting students claimed Kingston Estate, where they’d done vintage, had added silver nitrate and sulphuric acid to wine tanks. Both of these are illegal in wine. They also claimed pure ethanol was added, along with oenocyanin tannin to make pale wines red.”

The full article can be read here. It’s worth reminding oneself of the naughty side of the wine industry.

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