Australian winemakers throw down gauntlet

Press, 17 June 1988, Page 30

Australian winemakers throw down gauntlet

Wine

witn

Phillip Pye

It has been a most interesting exercise observing both the retailers’ and the consumers’ attitudes to the small amounts of very well priced Australian wine entering New Zealand. I noticed recently a very good Australian Chardonnay being retailed at a mere $8.45 a bottle. Most New Zealand producers would claim they would find it a most difficult task indeed to even get the wine into the bottle for that price. Such prices provide this writer with enough supportive evidence to perceive that we will very soon see Australian producers battling it out in the New Zealand retail sector in very much the same veining as they do in Australia. The big drawcard for the Australians at the moment is the C.E.R. agreement. It is going to be even more interesting to see how New Zealand wine producers fight back. This writer spent several years marketing Australian wine. Most of that time was spent in Sydney, where there is an old adage, "May the best price win.” Around 95 per cent of consumers are now well used to being able to buy a mixed dozen of pretty good-drinking Australian wine for under

$lOO. The retailers are well aware of the consumers’ buying habits and buy products that can be slotted into competitive price categories. Making and marketing wine in Australia is a tough game. The consumer is now used to seeing million-dollar marketing for five-dollar products. The producer has to sell a lot of product to obtain a, respectable return on his investment. Many producers simply cannot effectively compete and have ended up moving product without profit just for cash flow. I have in fact noticed some such products appearing in New Zealand liquor stores and being sold at very competitive prices.

Let us hope and pray for the wellbeing of our

own wine industry, and that we do not end up as a dumping ground for surplus Australian wine. There again, maybe a good bit of competition could be healthy for an industry that still displays an aura of complacency. New Zealand wine producers in general haven’t had to bear the cost of large-scale promotional portfolios. Many have had no trouble selling everything they produce.

I believe that in time the consumers will avail themselves of the array of very good and very well priced Australian wines that will be available; in all honesty, the consumer is as parochial as his back pocket. Many retailers will take that final step to Australianised operating methods, that is, dictating to producers how much their products should sell for, and we will see New Zealand-based Australian sales and marketing teams operating in a very professional but aggressive way.

New Zealand winemakers are going to have to very quickly gather some entrepreneurial marketing skills. The few who do display such skills, namely Villa Maria, Giesens, Montana, Corbans, Babich and one or two others, will survive.