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           Sydney Time

  

            

   Copyright © Ric Einstein 2009

 

 

 

 

 

Jay Miller – The Wine Advocate on Oz Wines (5 March)

  

The latest issue of The Wine Advocate has just come out. In days gone by, especially when Robert Parker was doing the reviews, punters waited with baited breath for the annual Oz edition. Now, with Jay Miller at the helm, its launch comes with nary a whimper.

 

Many people who have seen Miller’s introduction to the Australian segment, titled “Australia 2009: Into The Abyss” agree with his pronouncements, and in the main they are accurate. However whilst Miller sums up the woes of the Australian category in the US, and he makes much mention how it came to be in its current, sick state, his situational analysis misses a major chunk of the picture.

 

Miller points out that that the numbers show that Oz wine exports to the US have dropped dramatically; more than any other country, but the under $10 category actually experienced double digit growth, whilst the over $20 category decreased by over 50%. Miller states, “Even though the (under $10) category seems to be expanding, it has had an overall negative impact on the perception of Australian wine quality. Much of this insipid bulk wine has turned off aspiring fine wine drinkers to Brand Australia making it difficult to move them up the quality totem pole because they have already drunk from the tainted well. In contrast, imports of Argentina wine have been booming and I would assert that a principal reason is that the equivalent to “Critter” wines in Argentina are consumed internally while the entry level of imported Argentina wine is qualitatively far higher than that from Australia. It thus becomes a much easier task to convert new fine wine drinkers to upscale Argentinian wines because their entry level experiences have generally been much more positive.”

 

In terms of critter wines, Yellow Tail was a huge success and many others tried to emulate their success. It’s also true that many of the imitators produced inferior wine, real plonk!  But I disagree with Millers assertion that this has a big impact on the above $20 category. The vast majority of people drinking wine at under $10 a bottle, never, ever, move above that price point. I know many people my own age that profess to really like wine and have been drinking it for thirty years, or more, even on a daily basis, and they never buy wine that’s more than $10 a bottle. The reason is simple. If you put down a First Growth in front of them, they could not tell the difference between it and Two Buck Chuck, except that the inferior wine may be “easier to drink.” Those that do decide to try something different are normally open to suggestion, especially if the suggestion comes from a well respected wine writer.

 

The bottom end situation may be contributor, but it is a small factor compared to the rest.

 

The critter wines’ comments don’t adequately explain what has happened to those people who were already buying in the above $20 segment and why they have suddenly stopped buying, in droves.

 

In fact Miller then goes on to pose that exact question, and uses the words of an ‘unnamed, prominent importer’ to answer the question. In part they said, “The market got bored – plain and simple. There was no excitement in the category…” Another nameless importer told Miller, “This year quite a few mainstream publications [have been] predicting the implosion of the Aussie category, bemoaning that everything tasted the same, too alcoholic, too many cutesy labels hiding inferior wine, etc.”

 

Miller then goes onto write, “There is no question that at the upper end of the market Shiraz has become the grape and Barossa and McLaren Vale the regions. If consumers know more than that, they qualify as experts. How many people know that in these regions Grenache, Cabernet, and Riesling excel? How many people are aware that superb Pinot Noir and Chardonnay grow in Mornington Peninsula and Yarra Valley? Or Shiraz in Heathcote? My eyes were opened when I visited in September 2008 and did some tasting. Yet it appears that a good many American importers stopped their searching at the borders of Barossa and McLaren Vale. In retrospect it appears that the Australian wine market over the past 10-12 years has had many of the characteristics of the bubble phenomena of high-tech stocks and real estate. When the category got hot (and for this Dan Philips of The Grateful Palate has to get much of the credit) other importers rushed to Australia (especially to Barossa and McLaren Vale) and bought indiscriminately, ultimately flooding the market with the kinds of high alcohol, no terroir, and manufactured wines that have turned consumers off.”

 

In summary, Miller reasons that the decline for the above $20 Australian segment boils down to the market getting bored; everything tasting the same, high alcohol, no terroir, and manufactured wines.

 

If we are to truly understand how we got to this position, we must look at the history of the category.

 

The category (above $20) took of in the US when Robert Parker was creaming his draws over the 1998 vintage in South Australia. His genuine enthusiasm was contagious and was undoubtedly responsible for the explosion of Australian wine sales in the US. Not to put to fine a point upon it, the category was new, the American wine buying public had little/no experience with it, and Parker was seen as the wine God who knew all. His pronouncements were like that of Moses when he came down from the mount. This is not Parker’s fault. The masses gave him the power. Single handily, Robert Parker did more for Australian wine sales than any other person in the history of our wine business, and for that, the industry is eternally grateful.  

 

All was well in the Oz wine garden and many producers, especially those that clocked high scores from Parker did very well. Someone else who did bloody well from it was Parker and Miller’s friend, Dan Philips of The Grateful Palate, who also just received another free, honourable mention in Miller’s report, unlike the the other two respected importers who remained nameless. The Grateful Palate did much for the Australian wine industry that was positive, but they, and others, were also not averse to lining their own pockets at the long term expense of a number of wineries. The way it worked was simple. A wine received a big score, and the importer then also ‘received a big score’. The wine in the importers warehouse was suddenly sold for way more, sometimes two or three times more, than the previous vintage, (or even the same vintage before the scores came out.) They say that the market sets the price, and whilst that is true, the greed factor ruined the medium and long term marketing effort of a number of Australian brands in the US. If your wine sold at $35 for vintage x, and then sold at $95 at vintage x plus one because it copped a high score, then when vintage x plus 2 rolls around, and the score is good but not great, the brand has a problem. If the $95 price is maintained, it won’t sell. If the price drops, people won’t buy it as it’s seen as inferior. Yoyo pricing is not a good way to establish a brand, especially one that is relatively new in a particular market.

 

As time went on, and the Australian category still garnered high Parker points, especially for a certain style of Australian wine. They tended to be big, bold wines from McLaren Vale or the Barossa. It would not be an understatement to say that many other wine professionals, a number of whom had far more experience with the Australian category, did not agree with Parkers analysis on these high scoring Oz wines. Even the recipients of these high scores, who were extremely gratified to receive them, have told me in confidence, they would not rate their own wines as highly as Parker.

 

At that time, high Parker points on Oz wines were a license to print money. Many Australian producers tried to emulate the wines that were doing well in the US. The bandwagon was becoming a juggernaut with producers trying to make wine that would gain high Parker scores. Why? Because the market wanted them, and thanks to Parker, they were selling well. The Parker factor was at work, and working overtime.

 

In issue 155 of The Wine Advocate (2004) Parker said, “The real glories are the classic old vine, South Australian cuvées of Shiraz, Grenache and occasionally blends of those two varietals with Cabernet Sauvignon. ….. There is no other place in the world that can match the kind of wines being produced from old vine Shiraz and Grenache McLaren Vale and Barossa vineyards.”

 

Later in the same issue Parker states, “In Western Australia, classic wines emerge from the Margaret River area. These offerings come closest in spirit and style to the finest Bordeaux, but make no mistake about it, they are not Bordeaux, and even at their finest, they rarely compete with the best of Bordeaux.”

 

Parker’s comments on Western Australia, whist looking complimentary on one hand, are damning with faint praise on the other. This is especially so when you have a look at the scores, or lack of them on many of these wines in that issue. The Wine Advocate reviewed the following WA wineries, Alkoomi (4), Gralyn (2), Leeuwin (6), Mad Fish (2), Moss Wood (5) Pierro (3), Vasse Felix (7) and The Wishing Tree (2). That’s a grand total of eight wineries, twenty red wines, and eleven whites. The Moss Wood 2001 Cabernet Sauvignon gets 92 points and there is no mention of Cullen.

 

If you ignore the fortified wines, less than 9% of the wines reviewed in TWA Issue 155 come from Victoria so in essence, almost 90% of the wines reviewed are South Australian and most of those from the Barossa and McLaren Vale.

 

It is worthwhile remembering that Miller has just written, “Yet it appears that a good many American importers stopped their searching at the borders of Barossa and McLaren Vale.” Not surprising when 90% of what was reviewed by ‘the man’ was from these two regions. Something that Miller, not surprisingly, fails to mention.

 

In Issue 161 of The Wine Advocate, released in 2005, Parker's comments on Margaret River were ‘interesting.’ He states, “Australian wine experts claim that Australia's most French-like Cabernet Sauvignon and Chardonnays come from this area, which produces wines with higher natural acidities.”  He then lists a number of the better producers. Notice, Parker does not tell us what he thinks of the area, he tells us “what our experts claim.” This is tantamount to damning the area by omission.

 

In the same issue on the Yarra Valley Parker pulls no punches stating, "This is Australia's most fashionable viticultural area as well as the darling of their wine press. Its proponents (the provincial Australian wine press) argue that the climate and resulting wines come closest in spirit to those of Bordeaux on Burgundy in France. I am not convinced….. there is much more ‘sizzle’ than substance for most wineries from Yarra Valley.”

 

In my review of TWA 2004, I wrote, “Also, very few of the wines outside the mainstream areas (Barossa and McLaren Vale) rated highly (with the exceptions of the fortified wines) and as long as they continue to score mediocre Parker points, they will get lost in the wash. The style Parker likes has a big impact on his scores, this is not criticism, it is just the way it is, and as long as that is the case, the other regions and styles will be overlooked by Parker followers because they are almost being overlooked by Parker himself.”

 

In the latest edition, Miller states that the importers have been slack in not seeking out wines from areas other than South Australia. Over the years, I have spoken to a number of these importers about this subject. I know for a fact that many of them have imported a number of wines from Victoria and Western Australia. However, when they were shown to Parker, they generally did not impress and did not gain scores that would ensure their success. Therefore it has been up to the importers, and many of them have worked damn hard at it, to promote these wines and get them accepted in the US. However, when the reps go out to the distribution chain, the first question they ask “what score has TWA given it.” At a pinch, they may be able to get away with quoting a score from Wine Spectator, but the problem remains, the chain requires favourable scores. When Parker was reviewing the Australian segment and it was at its peak, Parker was not really impressed with much outside of SA, so the importers are between a rock and a hard place.

 

Much of the US wine market is relatively unsophisticated. Many wine drinkers have not had the wine bug for long. Those who are new ‘into wine’ generally don’t have a great deal of confidence in the subject and need advice. Two names have an astronomical impact when it comes to providing advice. At the more expensive wine end, Parker is the man and The Wine Advocate is the publication. The second most influential is the Wine Spectator, which is more of a lifestyle publication than a specialist, serious, wine journal.  A huge amount of power has been vested in these two publications by their readers. The result is that Parker (in particular) sets the trends, in what amounts to a wine fashion market.

 

Parker made the Australian category a success!

 

About three years ago, the disenchantment with the Australian category started to set in. Many of the people who had bought and cellared these high point wines based on Parker points, found that they were not to their liking, or decided that Parkers points were somewhat generous, and that meant the wines did not look like great value.

 

In the 2005 TWA Parker wrote, "Another myth about Australian wines is that they will taste alike. Of course there is plenty of industrial crap that I wasted days tasting through, but the top-notch wines are dramatically different, even within the same viticultural regions. However, trying to portray Australia as some sort of monolithic wine producing region is a knucklehead attitude, and completely ignores the reality of actually tasting the wines, especially in view of the diversity of Australian wine styles, even within the same region.”

 

Despite this pronouncement from Parker, consumers now don’t agree. Possibly because in the 2005 edition, about 80% of the table wines reviewed were from South Australia. And it was the wines that were being reviewed, and receiving high scores, that were being purchased.

 

Whilst Parker and the TWA made the Oz category incredibly successful, it also had a huge influence in its demise in the US. If you have looked at almost any US wine forum over the past three years, you will have noticed the disenchantment by Parker followers in relation to his Australian scores.

 

So, whilst the factors mentioned in Miller’s introduction to TWA holds much validity, it fails to mention that one the major causes in the decline of Oz wines in the US was the very publication that employs him. 

 

 

 

Feel free to submit your comments!

From Wright Sullivan: Friday 6 March

Thank you for the Jay Miller article. As an American consumer whose favorite wines are all from Oz, it was extremely helpful in understanding the evolution and current state of the market for Australian wines in the USA. Appreciate it.

 

From Miles Cornish: Wednesday 18 March

 

As someone who also makes his own wine each year in the Hunter Valley (a region that offers a clear point of stylistic difference from other Australian regions), I was once again bemused to see that out of the hundreds of wines previewed, only one of them (Margan Shiraz) was from this region. This highlights the US (and to a lesser degree) the UK's tendency to categorise Australian wine as the one entity - despite statements to the contrary.

Whilst I agree with many of your observations I disagree with your views that in the US the $20 and above category is largely unaffected by the continued strength of the £10 (and below) category. Whilst I accept that both sectors appeal to very different consumers, critically, consumer perception in the $20 and above category plays a vital role in the decision process. As happens in the UK, Australia's success at the budget end of the market has lead the average consumer to conclude that Australia specialises in 'entry-level' wines. Once this view is formed it is frustratingly difficult to encourage consumers to open their minds to the possibility that we also make world class wines in more expensive price brackets. This leads to a biased mindset in some consumers against Australian wine in the form of 'wine snobbery' when they consider purchasing a $20+ bottle of wine. Its as if they feel that they want 'proper' wines when choosing more expensive wines.

Interestingly, New Zealand has yet to suffer a revolt in the $20 and above segment (or at least not suffered the % decline that Australia has). Could this be linked to the fact that they lack penetration (intentionally or otherwise) within the $10 sector. Additionally, unlike Italy or in particular France, Australia has yet to receive truly global critical acclaim for its top wines. Without this, it makes consumer acceptance of dissociated 'budget' and 'premium' market sectors' problematic at best. Perhaps in due course Australia will receive lasting appreciation that we make truly world class wines (something much more universal that the odd 100 point wine!) However until then, it clearly remains a challenge for the US (and UK) consumer to appreciate both the diversity of style and the breadth of quality that Australia has to offer.

It is high time that the AWBC recognises that in order to reverse our current export decline across several markets it is necessary to lead from the top down. It is vital for it to continue to highlight regional variation (not inner-regional) and critically, to promote our very best wines (not necessarily our biggest corporate levy payers' wines) on the world stage.

Miles Corish
Managing Director
Bowland Forest Vintners (UK) and Finch's Line (Hunter Valley)

 

From David Rawson: Friday 20 March


I read your article on the "Abyss" and agree with you on all points. However, I think that you overlooked one stylistic factor that has contributed to the lack of sales in the US. That factor is the trend away from new oak. Australian wine can achieve levels of ripeness year after year that regions like Bordeaux can only accomplish once(2005) every 20 years.
 

Back in 1998 producers were taking this excitingly ripe juice and hitting it with large amounts of new oak. The result was that this extraordinary juice would integrate with the oak and become something totally unique. The trend away from new oak which has been championed by people like Campbell Mattinson has led producers to drop there oak levels down to 20% or less and the result is, particularly in Shiraz, that all the wines taste like hot Welch's Grape Juice. Combine this with the inflated prices and there is your abyss.
 

I agree that there is nothing worse than too much oak or cheap oak in wine, however Australia rules when the formula is old vines and new oak. And I wish that you blokes would get back to the 1998 style.
 

Copyright © Ric Einstein 2009

 

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