Penfolds wins, FARE battle, Chinese market

More than one star

Fantastic news: Penfolds has been voted the World’s Most Admired Wine Brand by Drinks International. It’s been in the running for several years and it’s good to see it reach the top spot. The World’s Most Admired Wine Brands editor, Holly Motion, said: “There is no sure-fire way of getting into the top 50 and Penfolds’ ability to appear in all six lists is a testament to its brand identity and ability to not only stay in the Academy’s consciousness but to push to the forefront of it.”

It was not the only Australian brand in the top 50. Congratulations to:

  • Yalumba: 19th
  • Brown Brothers: 28th
  • Jacob’s Creek: in at 33rd
  • Wolf Blass: 39th
  • Lindeman’s: 42nd
  • Hardy’s: 44th

Battle to the end

Paul Evans may be leaving the Winemakers’ Federation but it’s good to see him battling to the end. He has provided a sharp response to the Foundation for Alcohol Research and Education (FARE) bleating to the Government about raising taxation on wine to reduce health and violence issues. Evans (extracts):

FARE’s claims come around like a broken record and are based on incomplete analysis on the impact a tax hike would have on regional communities.

“The reason why wine is taxed differently and preferentially to other alcohol types is clear cut.

“Wine is different when it comes to our socio-economic input into regional Australia, employment footprint, contribution to export earnings, profitability and access to capital compared to the vastly different brewing and spirits industries and it’s only fair that alcohol tax arrangements reflect this. 

“The Federation believes wine must continue to be taxed within the existing WET legislative framework and that any future changes to wine tax arrangements are done so within this framework and not shifted to an excise-based approach as is the case for beer and spirits. The Federation does not advocate how the WET should be calculated.

“Speculative reports in the meantime such as those pushed again and again by FARE, need to be seen for what they are – headline grabbers that will hurt the local industry and must continue to be ignored by Government.”

FARE is very crafty as it tempts government with statistics that show, following their modelling, there would be more cash in treasury coffers.

Its submission to government on 8 March suggests taxing wine on its alcohol content and not on wholesale price. It estimates government could pull in an extra $2.9 billion a year.

It also wants government to raise excise tax on all alcoholic drinks by 10 per cent and to peg the annual increase in the excise rate to average weekly earnings.

For years TKR has been concerned that health and violence issues caused by alcohol will be the harbinger of increased taxation on wine. We admit wine can play a part in poor health and generate violence, but not as much as other forms of alcohol. Being neutral about the issues, TKR firmly believes wine drunk in sensible amounts does more good than harm.

 

We hope, and would pray if that were our inclination, that whoever takes over the role of CEO at the federation continues the challenge Evans is conducting.

No joke

Chinese comedian Guo Degang gives Victorian wine producers massive boost in export saleswas the headline of a news item on the ABC website last week.

According to the report, Guo is a celebrity in China. He owns a string of comedy clubs, has more than 64 million followers on social media site Weibo and is extremely rich.

ABC: “He plans to export 800,000 bottles of his private-label wine, made by Victorian producers, with the promise of millions more to follow.”

The article goes on to say his first shipment of 15,000 bottles to Chinese distributors sold in one hour and it is expected the initial order of 800,000 will be snapped up at a similar rate.

It would be good to see the follow-through. That is, the wine going from distributors to retailers and being bought by consumers. There has been a lot of wine left rotting in Chinese warehouses. We also hope it is going there under screwcap.

The wine is being sourced via Mount Duneed Estate, west of Geelong. Currently Mount Duneed produces:

  • Pinot grigio from the King Valley
  • Sauvignon blanc, chardonnay and pinot noir from the Yarra Valley
  • Blanc de blanc sparkling from the Yea Valley
  • Shiraz from Heathcote
  • Moscato from Victoria

If all goes to plan Mount Duneed will have to partner with other producers to reach the numbers being talked, which are in the millions of litres.

Not slow to jump on the bandwagon, Geelong Mayor Darryn Lyons predicts an increase in Chinese tourists to the region. Apparently, Guo is a magnet and fans go where he goes.

Fingers will be kept crossed at TKR.

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