Make no mistake about it, the wagons are circling around the encampment of Australian wine. The global wunderkind who has made every turn a winner for the better part of fifteen years is now looking more wobbly than it has since the ‘recession we had to have’. Some are of our own making, others beyond our control. The extent to which we Australians are making life difficult for our own wine industry is bewildering. We have planted grapevines, especially red grape varieties, like there is no tomorrow. While there would have been something resembling a two to three year oversupply blip had the industry’s own estimates of its production levels been accurate, a massive 10% under-estimate of the 2001 red crop has suddenly meant that Australia is already producing enough wine to meet its optimistic, but achievable export estimations of four years down the track. Add to this a dramatic decline in domestic sales commencing immediately after the introduction of the so-called Wine Equalisation Tax and GST, plus a decline in export wine sales in July 2001, and the industry is clearly feeling the heat. Media-driven talk of domestic recession is now beginning to bite, the global economic slowdown has reduced tourism to Australian resorts and wine sales are again feeling the pinch. Aside from the well-reported more devastating effects of the recent American terrorist crisis, it could not have come at a worse time for the factors that influence sales of Australian wine. The present Federal Australian Government is no friend of the wine industry and is hardly likely to do anything substantial to provide any concrete relief. It has clearly chosen to align itself more closely with the various forms of the so-called ‘health lobby’ than the wine industry, which views the introduction of the Wine Equalisation Tax – which actually increased the tax on wine from pre-GST levels – as a hostile act. Ever since the first 10% wholesale tax on wine introduced by the Hawke Labour Government, Federal Governments of both persuasions have increased the tax on wine. It is perfectly true that due to the size of the opportunity in front of it – and due to the ability of the Australian wine industry to seize those chances – the wine industry has been able to overcome increases in taxation and continue to grow and profit. Today Australia’s is the world’s most highly taxed wine industry, and the chickens might now be coming home to roost. Outside our shores, Australian wine is also fighting a battle of image and perception in key overseas markets, especially the UK. At present, the UK accepts one in every two bottles of Australian wine that is exported, meaning that Australian wine has a huge dependence on this most unreliable of customers. Just ask Australian farmers how they feel about post-Common Market England. There is a tangible feeling in the UK that Australian winemakers have become arrogant and complacent towards their UK customers. Most Australian winemakers deny this of course, or else believe that these concerns are directed at anyone but themselves. The argument runs that Australians have had it so good for so long that the standard of their wine is falling, or at least not keeping up with the improvements made by their competitors from Chile, Spain, the south of France and New Zealand. Encouraged by an increasing groundswell within the ranks of the English wine media, who are more frequently using terms like ‘boring’, ‘industrial’, ‘over-oaked’ and ‘over-ripe’ to describe Australian wine, the UK market is being bombarded with local opinion that there is more ‘complexity’, ‘authenticity’ and ‘character’ to be found in the recently renovated wines of traditional Europe. Whether they are right or wrong is not the point, for in cases like this, perception has a spooky way of becoming reality. Either way, there is a dire need for Australian wine to act to ensure that its wine is above the criticisms being levelled at it, and to swiftly redress the rapidly changing media perceptions. The time to do this is now, not next year. The US presently accepts around a quarter of Australian wine exports and the volumes are increasing rapidly. The US has also become a net over-producer of wine for the first time in its history. Ask an Australian meat producer about the approach Americans tend to take when Australians look like out-competing them on their own turf, remember that the new administration in the White House is a strongly protectionist one, and Australians can clearly take nothing for granted about wine sales in the US. As unlikely as it sounds, other than its consumers, here and overseas, Australian wine is running out of friends, especially friends in important places. Yet few industries add as much value to primary produce, employ such a mix of skilled and unskilled people in rural communities, sustain rural infrastructure, create a product that promotes this country’s inherent qualities, generate such export revenue, promote and sustain our tourism, and broadly promote the ‘Brand Australia’ concept around the world as does Australian wine. It would be a crying shame if this promising, but occasionally wayward young goose was prevented from laying its golden eggs. Australia’s Ten Largest Wine Export Markets Country Export Value (A$ million) Change from Year to August 2001 previous year (%) UK 697 +15.5 USA 426 +28.5 Canada 102 +30.3 New Zealand 80 +19.7 Germany 49 +11.3 Ireland 41 +11.0 Switzerland 32 +12.2 Netherlands 31 -15.5 Japan 29 -4.3 Sweden 18 -13.5
