Atlas Wine Group - Friday, April 20, 2012

Instead of paying a set membership fee covering all programmes, businesses will be able to register and pay at the start of the year just for those activities in which they wish to participate.

From the 2012/13 year, starting on 1 July, companies do not need to sign up for the full annual program in each market. Instead they are able to select the best markets that fit their brands.

There will be activities in domestic and emerging markets, as well as in traditional export markets.

James Gosper, Wine Australia’s general manager, said: “We believe our market programmes are well established and we are now at the stage where we can build in a bit more flexibility without compromising what we offer.”

“This evolution allows us to present a diverse range of activities to our increasingly diverse range of stakeholders.

“It is important to note, however, that this is not a change in marketing strategy. The corporation will continue to provide industry with core strategic activities aligned with the strategy and funded through export levy revenues. This includes maintaining our international offices.”

A prospectus for individual brand investment will be distributed in early May to wine producers, importers, agents and other stakeholders.

Wine Australia is hoping that the user-pays programs will “allow the industry to jointly invest in the future of the category.”

User-pays activities include Australian pavilions at trade shows, on- and off-premise retail promotions, consumer-focused festivals, sponsorship and events and Australian category trade/media tastings.

Source: Martin Crummy The Drinks Business

Oz wine giving the French a run for their money in China

Atlas Wine Group - Sunday, April 01, 2012
The average price of Australian bottled wine sold in China was just three cents a litre lower than for French wine, in the 12 months to the end of January. That's according to the Global Trade Atlas.

The US was in third place – $1.60 a litre behind Australia.
"When you consider that France dominates the really top end, where people pay more than $100 a bottle, then to be nearly level on average price is a great achievement," said James Gosper, Wine Australia's general manager of market development.

"The French still lead by quite a way in terms of pure volume of sales, but our focus is on promoting our premium wines rather than entry-level wines so these are encouraging figures.

"We have a great reputation for quality and this has struck a chord with China's emerging middle class."

The three other main providers – Spain, Italy and Chile – sell significantly less in volume and at much lower average prices than Australia.

China is now Australia's third largest export market after the UK and the US, but the leader for premium bottled wine. Premium volumes grew 41% in the past 12 months.

Source: WBM Online

Christie's China Announces New MD

Atlas Wine Group - Thursday, March 29, 2012
Christie’s has announced that Jinqing Caroline Cai is to be the new managing director of its Chinese operations.

Cai will work to develop the auction house’s services in the region, developing its business presence and working closely with “Forever”, the company’s licensing partner.

Steven Murphy, Christie’s CEO, remarked: “The importance of China culturally and economically is profound. We are pleased to reaffirm our commitment to the clients and cultural activities in this region with the creation of this new role and by welcoming such a highly respected leader as Jinqing Cai as our new managing director, China.”

Cai has joined from the Brunswick Group, a global public relations firm, where she was a partner and was “instrumental” in developing the company benefiting both foreign companies working in China and Chinese companies operating abroad.

François Curiel, president, Christie’s Asia, remarked: “A key priority has been to strengthen Christie’s China presence and familiarise Chinese collectors with the broad spectrum of our services, making it easy for them to transact with us.”

Cai’s post will become effective on 1 June.

Source: Rupert Millar The Drinks Business


Atlas Wine Group - Wednesday, March 28, 2012
Miguel Torres has added his voice to those predicting that China’s wine importers may be facing a period of consolidation following a phase of rapid expansion.

This has seen the number of customs registered importers grow from 800 just a few years ago to almost 4,000 in 2011.

“I am concerned that we could get an oversupply of wine coming from the massive imports from some of the new importers,” Torres told the drinks business. “We have started to see that some of the local companies are retreating from the market after just two to three years of being operative and other international companies are more reluctant to start in China.”

Torres, whose eponymous company was one of the first to invest heavily in building a distribution network in China, now accounting for 10% of the total turnover of Torres Group, believes that the market will “face a correction in the coming two to three years that will benefit the professional players”.

His views are backed by others, including Ian Ford, managing partner at rival importer Summergate, which along with Pernod Ricard, Castel, Suntory, Diageo, ASC and other foreign owned or influenced companies, is a major player in the premium wine market.

“In the near to medium term I expect to see a consolidation in the imported wine trade as the market normalises, digesting a period of overheated growth and expansion,” said Ford.

The total market for both imported and domestic wines continues to grow, up 21.5% in 2011 alone, with China consolidating its position as the fifth largest wine-consuming nation in the world as Chinese consumption continues on an upward curve.

However, in terms of domination of wine imports the balance appears to be shifting between foreign and domestic owned importers and distributors. Chinese companies such as the massive state-owned COFCO are capitalising on their established distribution networks to supply foreign wines.

COFCO’s stated aim is to be the leading importer of wines into China within five years, one of a growing number of challengers to the foreign dominated trade.

“We estimate that foreign suppliers are today dominating less than 15% of the market for imported wine, but this figure was closer to 50% a decade ago,” said Torres. “But there are also a growing number of joint ventures, some linked to distribution and retail.”

Fall out in the market is most likely to be among those general importing and distribution companies that piggybacked wine onto their existing operation, often primarily to service the gifting market.

Elsewhere, the bigger players, both foreign and domestic, typically continue to expand and consolidate their reach through a horizontally structured mix of importing, distribution and retail that has become something of a template for successful market penetration and growth beyond the hubs of Hong Kong, Shanghai and Beijing.

Source: Andrew Catchpole The Drinks Business


Atlas Wine Group - Wednesday, March 21, 2012
A Californian wine shortage is creating increasing concern over a tightening of global wine supply.

Reports from the Central Coast Insights Conference that the California wine industry is entering an extended period of structural supply shortage will add to the concerns being voiced globally that the era of global glut may soon be ending.

Speaking at the conference in San Louis Obispo, Matt Turrentine, of Turrentine Wine Brokerage, pointed to a disparity of 47 million cases between wines shipped from California and the 210m case yield of the 2011 vintage, arguing that vineyard plantings have not been keeping pace with growing demand, resulting in a doubling of bulk prices in the past 12 months.

Against a backdrop of global recession, which has seen the depletion of inventory by producers rather than an upping of production, this effect is being compounded in many major production regions by a combination of smaller vintages and, in certain key markets, continued growth in consumption.

The concept of a global wine glut has become so ingrained in the collective consciousness that the suggestion of a shortage just around the corner is often met with some incredulity.

But with strong growth in consumption in markets such as the US and especially China, where Vinexpo estimates suggest a 54% increase in consumption in the next four years to just over 1bn bottles annually, there have been many examples of bulk prices rising around the world as gluts are depleted.

Examples include the 2011 harvest in the Languedoc, where grape prices rose to a 10-year high. “The story has already turned from global oversupply to approaching global shortage,” says Languedoc-based Ivo Hassler, wine director at D&D International, responsible for sourcing wines across D&D’s global portfolio.

Similarly, regions in Spain such as Rioja, where 2011 yields were down in excess of 20%, and La Mancha, have reported a serious depletion of stocks matched by price rises. “We are no longer in a position of over-supply and in DOs like La Mancha and Valdepenas prices have had to rise,” reported Felix Solis Ramos, marketing and export director of Felix Solis Avantis, one of Spain’s largest exporters.

In Australia, too, Neil McGuigan, CEO of Australian Vintage, which accounts for up to 10% of the annual crush, describes a complex but cautionary picture.

“We have an oversupply of cooler climate and higher quality fruit,” says McGuigan. “But if you look to the big producing areas, where production has been decreasing and vineyards left or uprooted, then there is hardly any spare capacity at all.”

What all agree upon is that global recovery coupled with thirsty emerging markets presents a situation where those managing future supply need to start thinking ahead in terms meeting renewed growth in consumption rather than a continued cull of recent oversupply.

Source: Andrew Catchpole The Drinks Business

China warms to white wine

Atlas Wine Group - Tuesday, March 20, 2012
China is developing a growing thirst for white wine, according to Vinexpo.

Red wines still make up 91% of total wine consumption in China, but white wine drinking rose 19% last year, with 70% further growth expected by 2015.

Last week, the global wine and spirits exhibition group spelt out its views in Shanghai of the fast-developing Chinese wine market.

Dominique Heriard Dubreuil, chairman of both Vinexpo and Rémy Cointreau, said China’s developing taste for white wine presents an educational challenge to vintners worldwide.

“In general, Chinese people don’t like to drink something cold, but white wine is not at its best when warm,” she said.

According to research commissioned by Vinexpo, last year China overtook Britain as the fifth largest wine market by volume, behind the US, Italy, France and Germany.

Consumption of wine on the mainland and Hong Kong rose by 21.5%.

Within three years, greater China will spend more money on still wines than the UK, and become the world’s second biggest wine consumer by value, after the US.

Vinexpo expects China to consume over a billion more bottles annually between now and 2015 – a further 54% increase.

China is also on track to become the world’s biggest Cognac market by 2016, Vinexpo said, forecasting 47% growth between 2011-2015.

China is already Cognac’s second largest market, after France. But recently Chinese buyers have complained of having trouble finding the extra-premium spirits they prefer.

“In China, people want very old Cognacs, but global inventories of are not extensive,” said Dubreuil.

Source: Lucy Shaw The Drinks Business

Australian Shiraz Ripe for Revolution

Atlas Wine Group - Wednesday, February 01, 2012

Referring to the image makeover currently taking place in the UK for the country’s modern styles of Chardonnay, Eggins predicted: “The future of Australian red is like the future for its whites.”

Just as many winemakers have fallen out of love with the fat, heavily oaked Chardonnay styles for which both Australia and, by extension, the variety itself became renowned, so too Eggins suggested: “Some of us believe that Shiraz in Australian has become too big and rich.”

In addition to the Shiraz examples emerging from cooler sites and regions, Eggins noted: “how you ferment and mature it can help.” Drawing a parallel with the recent evolution of Australian Cabernet Sauvignon, he explained: “For several years in Australia we’ve been cutting back on oak with our Cabernet Sauvignon to focus on fruit – I think you’ll see the same thing happening with Shiraz.”

There are signs of growing recognition of these cooler styles of Australian Shiraz among the UK trade. Speaking to the drinks business last week, Alex Hunt MW, purchasing director for Berkmann Wine Cellars, picked out a region better known for its Chardonnay, saying: “The Yarra for me is exciting for its Shiraz.”

Eggins supported this point, arguing: “Wherever you can master Chardonnay and Pinot, Shiraz will follow.”

However, Eggins also insisted that winemakers should not abandon the bigger, oaked style of Australian wine, revealing: “The fattest, most oaky style of Chardonnay we make is the one we sell most of.”

Likewise, he acknowledged the trophies won, especially in the US market, by Wakefield’s 2006 St Andrews Shiraz, a 100% barrel fermented style, which Eggins described jokingly as “a ridiculous experiment”.

Based on the ongoing success of these wines, he emphasised the importance of introducing consumers gently to alternative representations of Australian wine. “Our real task is to educate the consumer,” he said, but warned: “Don’t do it so fast that you alienate them – you need to do it without a whiplash effect.”

Looking across Wakefield’s own portfolio, Eggins confirmed: “If people want a generous glass of sunshine, we can accommodate that too. You’ve got to be careful and understand the stylistic intent discussion within the context of the commercial reality discussion.”

Source: Gabriel Savage - Drinks Business

Australia Rivals Grand Cru Burgundy

Atlas Wine Group - Sunday, January 29, 2012
“Australia is the only country in the world that can hold up against Burgundy,” claimed Alex Hunt MW, purchasing director at Berkmann Wine Cellars.

This praise for the country’s Chardonnay came as Hunt showed off the UK merchant’s thoroughly revamped Australian portfolio at yesterday’s A+ Australian Wine trade tasting in London.

In total, Berkmann has now replaced 85% of its existing Australian range, with Hunt summing up the end result of around 60 listings as “two wines smaller but much more diverse.”

He explained to the drinks business: “The idea is to be as representative as possible across regions, varieties, price point and alcohol level in as few wines as possible. There are no redundants here.”

This revision of Berkmann’s Australian range represents just one result from a busy 12-month period which has seen the Burgundy specialist bring in wines from Russia, Turkey, China, Hungary and Switzerland, as well as returning India to its portfolio.

“Since the recession we’ve been in conservative mode, but we’re bored of that,” remarked Hunt.

Picking up on the positive momentum and image makeover being generated by Australian wine in the UK, Hunt confirmed: “The fact that Australia is so exciting at the moment meant we couldn’t afford to stand still.”

At a time when Australian Chardonnay is widely agreed to be leading the country’s comeback, Hunt remarked: “On the world stage, I would say Chardonnay is its strongest suit. Other countries can jostle a bit, but Australia is the only country in the world that can hold up against Burgundy”

Within Australia itself, Hunt remarked: “Geelong is our pinnacle for Chardonnay,” describing Berkmann’s listing from Lethbridge, a small producer which otherwise sells its entire production within Victoria, as “comfortable junior grand cru level.”

As for the challenge of convincing UK consumers and trade that it is worth paying for Australia’s top Chardonnays, Hunt observed: “You have to sell on quality. For Chassagne at the same quality you’d pay £50. If you want an appellation, you have to double your money.”

Despite being more commonly viewed as a leading region in Australian’s modern Chardonnay revival, Hunt argued: “The Yarra for me is exciting for its Shiraz.”

Tracking the evolution of this red flagship Australian variety, Hunt observed: “I don’t think it needed to reinvent itself to such an extent as Chardonnay. At the far end, a 15% [abv] Shiraz can work and be balanced, just like Zinfandel can.”

However, he highlighted the breadth of styles which have now become more widely available, saying: “Australia just needed to spread its wings and diversify to find those 13.5%, floral wines, but which are still very Australian, not chasing the Rhône.”

Looking beyond Shiraz, Hunt praised Australia for having “a more diverse range of red cards than other countries.” In particular, he picked out Cabernet Sauvignon as one to watch, saying: “There’s real regional excitement coming out of Cabernet; I’m glad it seems to be being taken seriously again.”

The new line up of Berkmann’s exclusive Australian agencies comprises: Deakin Estate from Victoria, Allegory from Western Australia, Fraser Gallop from Margaret River, Chapel Hill from McLaren Vale, Langmeil from Barossa, Katnook Estate from Coonawarra, Deviation Road from Adelaide Hills and Lethbridge from Geelong.

Source: Gabriel Savage - Drinks Business

China's appreciation for Australian wine reaches new heights

Atlas Wine Group - Friday, January 27, 2012

CHINA'S taste for top Australian wines is climbing as living standards rise and demand lifts, according to the latest wine sales data.

Last year, the rapidly growing market become the third largest destination for Australian wine with sales shooting up to $201.5 million in 2011, behind only the major markets of the United States and the United Kingdom.

Wine sales to China and Hong Kong helped prevent a larger decline in Australian wine exports which fell to $1.89 billion last year as exports to the US and UK went into reverse.

Leading Australian wine makers have moved quickly, increasing their marketing spend and opening cellar doors to tap into the increased spending power that has come from a growing middle class.

Late last year, Treasury Wine Estates chose Shanghai as the city in which to launch its Penfolds Bin 620 red wine, at $1000 a bottle.

In contrast, bulk wine shipments to China fell as cheaper bulk wine from countries such as Spain took preference.

The latest data from Wine Australia shows the biggest jump in wine exports to China was in top priced bottles. Red wine was the drink of choice with exports rising 42 per cent, while whites fell 4 per cent.

Overall China has overtaken Japan as the major market for Australian agricultural produce for the first time. Rural exports to China reached $4.4 billion in 2010-11 compared to shipments worth $4.2 billion to Japan.

The rising demand from China came as total Australian beef exports reached near record levels last year with 949,195 tonnes shipped overseas.

The surge in meat sales to China included beef worth $52 million.

Source: Nigel Austin - Herald Sun 

Wine Exports in decline, but prices go up

Atlas Wine Group - Friday, January 13, 2012

A decline in local production is though to be the trigger behind a 10 per cent decrease in the export of Australian wine, according to a report by Wine Australia.

Exports of Australian wine declined by 10 per cent in 2011, which the report reveals is in correlation with the fall in production of Australian wine in recent years as growers and producers work to combat the grape glut.

However, the average price per litre increased by one per cent for both bulk and bottled wine to $2.69 per litre, marking the first increase in the average value on a calendar year basis since 2007.

Both red and white wine suffered a decline, with white exports down by 15 per cent, red exports down by seven per cent and sparkling wine unchanged at two per cent.

Australia’s top five export destinations - UK, US, Canada, Germany and China - account for 80 per cent of Australia export volumes, yet all were revealed to be in decline by volume.

However, China recorded the largest number of exporters in 2011, with more than 800 wineries exporting their wine to China, ahead of just over 300 exporting wine to the UK.

Source: Amy Looker - The Shout