Thursday, April 29, 2010

Alister Purbrick calls for number of wine producers to be halved

I am gob-smacked by Alister Purbrick’s call for the number of wine producers to be halved, for a similar number of brands to go, and for a requirement that most producers have vineyards of at least 80 hectares. As I am sure most readers will know, Alister is a former Winemakers’ Federation of Australia President, and CEO of Tahbilk.

I shudder to think how many of Australia’s most revered boutique producers would be felled by the 80-hectare requirement, but my database suggests over 80% of the five-star wineries in my Wine Companion would go.

A few random names include Grosset, Penfolds Magill Estate, John Duval Wines, Rockford (one hectare!), Torbreck, Turkey Flat, Giaconda, Tapanappa, Clonakilla, Wendouree, Frankland Estate, Bannockburn Vineyards, Bass Phillip, Jasper Hill, Brokenwood, Lake’s Folly, Bindi, Curly Flat, Wirra Wirra, Primo Estate, Cullen Wines, Moss Wood, Dalwhinnie, Summerfield, Craiglee, All Saints, Chambers Rosewood, Campbells and Morris; every winery on the Mornington Peninsula, likewise Orange, Pemberton and Porongurup; every Tasmanian producer except Tamar Ridge and Pipers Brook; and every Yarra Valley producer except De Bortoli, Yarra Burn (just) and Yering Station.

I have tried to compress the list, leaving aside hundreds of wineries with strong brands, high quality wines and more than adequate financial support that would have to be vaporised. Surely, if Australia is to alter international perceptions it is essential these wineries survive. The halving of the number of producers would have grave implications for the funding of research and the activities (especially export) of Wine Australia.

On the other side of the coin, I am equally confused by the chorus of concern about the amount of Riverland/Riverina vineyards being removed. The balance, it is suggested by Alister Purbrick and others, is wrong. Purbrick says “We seem to be removing vineyards in a way where we get the tonnages right by the wrong vineyard mix. The attrition seems to be happening mostly in the warmer climate regions and not enough in the moderate climate areas.”

There are a number of problems with this. If the Henry tax review triggers a move to a volumetric tax base, the domestic market for warm (read Inland Rivers or irrigation areas) region wines will have to be nigh-on 100% exported.

So we will increase the percentage of wines at prices for which there is no adequate margin, even at rock-bottom and unsustainably low grape prices. By cutting overall production by 50%, it seems we need to preserve the irrigation areas, and (plucking figures from the air, I admit) decreasing moderate (aka cool) area plantings by 70% and irrigation plantings by 30% to come up with an overall 50% cut. What’s more, if you talk tonnes rather than hectares, the figures will blow out further.

I was under the impression the Murray Darling system was under dual pressure from decreased rainfall that the CSIRO/Weather Bureau forecast will be a permanent decrease, and that water prices have to rise significantly. Even if there is adequate water to supply vineyards to a level that Purbrick et al wish to see (surely debateable in the Murray Darling, less so for the time being in the Riverina) I fail to understand how this sunshine and water in a bottle is going to provide grape growers and winemakers with adequate returns, and in any way help restore Australia’s battered reputation abroad.

1 comment:

Hugh Ammundsen said...

Superb analysis James. If Australia's future is to stay "cheap and cheerful" but to drive prices (to be followed by margins) down even further, then by all means decimate the cool climate side of the industry - after all it produces the vast majority of Australia's truly fascinating wines, but apparently they are the side show.

Yet in a world where water politics is in the early stages of transition to "social consciousness", anyone producing alcoholic beverages from significant volumes of irrigation water may feel very uncomfortable only a few years from now.

Given that cool climate Australia is blessed (among other things) with dry grown vineyards of stunning quality (many unfortunately smaller than 80ha)it is tempting to express the view that only a fool would want to bulldoze them.

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