Croser calls for two-speed leadership

By Brian Croser

Australian wine luminary and wine producer (ex Petaluma, now Tapanappa) Brian Croser issues a cri de coeur about the state of Australian wine leadership.

Barring global financial accidents, geopolitical upheaval or an asteroid strike, 2014 should be a good business year propelled by the gathering momentum of the US economy, which should also tame our Australian dollar. Fine wine is at the forefront of consumption growth and the US has a structural deficiency of grape supply. I write this in Oregon observing the ramping up of fruit, land and vineyard prices.

Australia finally has a business-friendly government and the Australian grape-growing season, based on long-term weather forecasts and our wet winter past, looks like being kind.

Can we take advantage of the opportunity of the global tightening of supply and the increasing appetite of the US and China for fine wine?

Jancis Robinson recently quoted a prevailing attitude in New York that southern hemisphere wines are out of fashion (see Grüner fights NY faddishness), yet the wines of Australia, New Zealand, Chile, Argentina and South Africa have never been better, and Australian wines keep scooping awards against northern- and southern-hemisphere competitors.

What’s the problem?

Answer: we have poor image in those attributes that most count for fine wine. Our terroir credentials are distorted by Australia’s hot, dry climate profile, seen as suitable only for overripe Shiraz – and by the corporate industrial image of our producers. We compound the image problem by constantly treating our industry like a highly infectious patient who needs continual monitoring and diagnosis – and finally by the public wringing of hands and global announcement that the patient is in isolation in terminal decline.

How can we convince the discriminating fine-wine consumers of the globe, seeking quality, prestige and the dignity of great provenance or terroir, when we are telling the world our industry is a basket case?

Australia has great diverse natural advantages for wine production, unequalled quality of human capital for the production of fine wine and an enviable isolation from the pollution pressures of the great population concentrations of the globe. The rapid planting of coolclimate, highly differentiated terroirs in south-eastern Australia throughout the 1990s has been blamed for Australia’s grape over-supply and all of the hand-wringing economic malaise that has followed. Those same vineyards, now mature and doing their best work, represent a great opportunity in the global battle for a share of the fine-wine market. But only if we achieve a complete inversion of the current self-destructive, forensic public analysis of our wine community’s perceived problems.

We should be proclaiming our outstanding fine-wine strengths, not decrying our short-term supply excesses and exciting the age-old war of words between the irrigation dependent, branded commodity grape and wine producers and the fine-wine producers of Australia’s cooler regions.

I lament the lost opportunity of the past decade to build Australia’s fine-wine reputation on the solid foundation of scientifically exploring and patiently explaining our great terroirs to the fine-wine community of the world. Our industry leadership is caught between the volume imperatives of the few branded commodity-wine producers and the many diverse, albeit disorganised and struggling, small fine-wine producers who have limited political and financial clout. The branded commodity-wine producers of Australia are facing extreme competition from low-cost producers such as Chile, where labour is $2.50 an hour, and are penalised by Australia’s escalating costs where labour is more like $25 an hour, penalties exacerbated by bureaucratic impediments to doing business. With few exceptions, our small producers have neither the global fine-wine image nor the international respect to excite the price multiplier that is required to reinvest in quality improvement as is happening in Oregon, California and New Zealand.

Yet Australia’s fine-wine quality remains high.

Industry leadership has retreated to the safe territory of appeasement of the large producers, pacifying the small and justifying all by the apparently corporately sound management practice of measuring all that can be measured and using the past as template for the future.

We cannot capture the fine-wine future by pulling out those vines condemned by committee to achieve an artificial balance of supply and demand.

The fine-wine future can only be realised by proclaiming our great terroirs and the wines produced from them and portraying a future where Australian fine-wine prices will justify determined reinvestment in the improvement of quality in our vineyards wrought by better rootstocks and clones, on closer spacing, managed meticulously by highly selective mechanisation.

Real industry leadership would have recognised the essential dichotomy of Australian wine, all wine, a decade ago and would by now have convinced a significant cohort of the globe’s fine-wine consumers that Australian fine wine is a worthy alternative to Bordeaux, Burgundy, Oregon and Napa, especially in the US and UK, markets that have been failing for Australian wine. We need one strategy for fine wine and another for branded commodity wine, recognising the very different attributes and markets of each, eliminating the public bad temper between the hot, riparian vineyards of Australia and the swathe of genuine cool- and moderate-climate vineyards of Australia’s coastline.

The real and enduring structural commodity grape surpluses in the European wine countries do not interfere in the public mind with the perception of the scarce fine wines of Bordeaux, Burgundy, Rioja and Barolo. They are not perceived as the same product from the same industry despite being made from grapes from the same country.

Meanwhile, the Languedoc, which is perceived as a large, flat, hot vineyard region in continuous oversupply, cannot achieve the image differentiation for the fine wines from its many and varied genuine fine-wine terroirs. Languedoc is a European metaphor for Australia.

Current industry leadership is not visionary; it is corporate and for political convenience it is revisionary. Appeasement of the commodity-wine producers and the political compromise of treating all Australian wine the same has been achieved at a fearful cost to our 3,000 small and medium-sized fine-wine producers over the past decade.

It is amusing to see how resilient and obdurately resistant the cool-climate vignerons of Australia are to the incessant appeals of industry leadership to pull out 20% to 30% of their vines. It must be so frustrating to the industry leaders analysing the statistics of the past that these economically illiterate vignerons cannot see the errors of their past, root up their dreams today and forget their aspirations to achieve the same quality, image, recognition and prices in the global fine-wine market place as the French, Californians, Oregonians and others.

Where among our public industry leaders is there a passionate hands-on fine-wine producer exciting the global fine-wine community to join us in our vision of Australia as a leader of fine-wine quality achievement? Just watch Aurelio Montes as the leader of the Chilean fine-wine industry and the difference he will make to the perception of Chilean fine wine. Vision and image are necessary amplifiers of real terroir and wine quality and we lack those amplifiers.

Whether it is diluting the WET tax advantage for small producers or contemplating an excise demanded by the beer- and spirit-dominated corporate wine producers of Australia or attacking the supermarket duopoly, the agenda of industry leadership largely serves those large corporations. When Australian fine wine excites the same global competition as the French or as the Californians from the US market, the supermarkets will be only too willing to pay for and respect properly Australian fine wine. May that day arrive quickly – but it won’t arrive at all without some courageous, visionary and visible industry leadership. And, please, no more introspective reports.

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