Australia Explanation

Brian Croser’s comments published in recent days in relation to the issues affecting Australia and the way forward, amplified by the analysis by Professor Larry Lockshin that Australia needs to remove up to 30% of its vines are important and credible.

I have been asked in relation to the analysis I posted on Australia last month why it might make a difference to focus specifically on the hot climate areas rather than across the board.

I think, in essence, and in part I admit I am cherry picking from elements of Brian Croser’s analysis, that there are two components and corollary impacts to any vine pull strategy:

1) focusing only on vines in the hot climate areas (I was more diplomatic and just called them warm – Croser has just called them what they are) is always going to be achieved more quickly and efficiently.  It is far more targeted and therefore will always be easier to execute. It also means that there can be more precision in the process, because going to a region of mostly small growers and asking it to come up with a 30% vine pull will always underachieve owing to the various forms of emotional and economic inertia that drive decisions in such areas.

2) Cutting out just 1/3 of the hot climate grapes (i.e. 20% of the Australian total) with the rest to come from elsewhere would mean that somewhere between 40-60% of Australia’s wine production would still be hot climate grapes for making cheap, acid adjusted etc style wines that helped to create the problem in the first place.  These wines and the companies making them would continue to dominate Australia’s marketing spend so that there could be no real progress towards an overhaul of Australia’s image back to take it towards recognition as predominantly a fine wine producing nation.

While some other areas may find merits in participating in a vine pull arrangement or scheme, that should not distract from the key motivation involved: repositioning Australia.

While the large company brands drawing on hot climate fruit may suffer from this process, it would not do the quality of those brands any harm to draw on fruit from some better quality fruit from other regions – such as what appears to be a current excess in the Barossa – and they may find that such a structural re-shift has the effect of reducing the discounts atached to branded wines to a greater extent than the higher cost of fruit.  Such a process would also help reduce the degree of “label congestion” that can occur in some regions with high concentrations of small to medium producers all producing their own labels, with consequent downstream retail exposure issues.

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