A great grape crisis

6 October 2009

Written by:

After a breakfast of porridge, Mark Gifford pulls on his gumboots.  It has been raining and the ground is soft. As he traipses through the seven hectares of grapes on his Margaret River vineyard, Blue Poles, he thinks of the work ahead. It is spring and the vines are budding. For the Gifford family this means days of endless weeding, vine spraying, wire dropping, mulching and thinning.

Around the vineyard, he has set up experiments on the vines. He’s trying to find the best ground covers, under-vine treatments and pruning methods.

In Australia’s multi-billion dollar wine industry, Gifford is only one of many small producers dedicated to making a good drop but facing the immense challenges of big business.

Australian wine exports reached a record $3.02 billion in July 2007. Although Australia is the number one supplier of imported wine to the UK, Ireland, Singapore and New Zealand, our wine industry is facing a crisis.

Overseas, wine experts are chortling at the idea of fine Australian wine. Indignant Australian producers, including Mark Gifford, are searching for a solution to our image problem.

The trouble began in 1998 with influential American wine critic Robert Parker Jr. His personal taste for high-alcohol, fruit-driven reds led him to Barossa shiraz. When he extolled the virtues of this shiraz, the great Australian wine rush began. International collectors began paying top dollar for Aussie wine.

What was once a cottage industry soon became a multi-billion dollar one. Between 1999 and 2007, Australia’s foreign wine sales tripled, becoming the world’s fourth-largest wine exporter in 2007.

But like all luxury industries, fashion plays a large part in product popularity.

When big, gutsy, high-alcohol styles were shunned for the next big thing, the world forgot about Australian fine wine. No one had told consumers about the Yarra Valley and Mornington Peninsula pinot noir. Nor were they aware of Hunter Valley semillon, Margaret River cabernet and merlot or Clare Valley riesling. The highest selling white wine in Australia is now sauvignon blanc from Marlborough, New Zealand.

And so the crisis began.  Australians had allowed a Kiwi wine to outshine its own.

Today, large corporations produce 95 per cent of Australian wine. Fosters and Constellation are two alcohol companies that produce huge volumes of budget wine that they’re selling at bargain prices in supermarkets in England, America and Canada.

Australian wine is still popular, but not because it’s good. The average price per litre for Australian wine in English supermarkets is $2.95 Aussie dollars.

This cheap, fruity wine has been dubbed ‘sunshine in a bottle’ (cheap and cheerful industrial plonk!) and represents one whole end of the market. The other end of the market is seen as only one variety and one region based on one man, Parker’s, personal taste. The middle of the market doesn’t exist internationally because smaller producers can’t sell their wines to consumers who expect to buy Australian wine for a price comparable to bottled water.

There is so much of this cheap wine being produced that the Winemakers Federation of Australia is predicting the industry needs to reduce the amount of wine it’s producing by 20 per cent to stay profitable.

However, the organisation Wine Grape Growers Australia is worried about what would happen to that 20 per cent of grapes. Abandoned vineyards could pose dangerous biosecurity risks in grape growing regions should an exotic disease or pest arrive and not be seen.

Gifford also has concerns about a 20 per cent reduction. Since it’s the large corporations causing the oversupply of cheap wine, it should be the large corporations reducing their grape yields. However, Gifford is convinced that wine industry bodies won’t stand up to these multi-million dollar companies and instead muscle the boutique businesses out of the market.

“For little producers like ourselves, it’s extremely hard to get placement in stores and it’s extremely hard to get placement in restaurants because the restaurants get deals with major companies,” Mark Gifford says.

“The industry bodies are basically saying ‘for all you poor suckers out there, you have to pay the price for the large companies’ success, Gifford adds.

But what the large companies can’t offer consumers is an emphasis on regionality. Gifford, and Australian wine critic James Halliday, are promoting ‘terroir’ as a solution to the wine slump for boutique producers. Terroir is a French word that has no direct English translation. It means that a wine tastes distinctly of the place where its grapes are grown. Wines from neighbouring vineyards should taste different, even if the same person makes them in exactly the same way.

Halliday wrote on his website that new initiatives at Australian wine shows were intended to draw attention to the terroir of Australian vineyard sites. Once they’re known, the aim is to increase their value. Halliday hopes that if this happens, it will make economic sense for the rest of the industry to pay careful attention to terroir and the optimum grape growing process.

Because of terroir, a tenth of a hectare-sized piece of vineyard can sell in the range of six to 10 million Australian dollars in Burgundy, France. In Australia, the best hectares only sell for $85,000 – $100,000. Halliday hopes that if these wine show initiatives increase the values of Australian vineyards, a substantial marketing spend overseas will be justified.

The question is what is so special about French terroir?

Bachelor of Winemaking instructor Ann Manning says there’s no one answer. “Some people say that terroir is just the patch of dirt,” she says.

They say the French just use terroir as a marketing tool. But some of the best Australian producers believe that you’ve got to have a good site to grow good grapes.

“How far they go in expressing terroir really depends on their personal philosophy,” she says.

Gifford is one of those producers who believe in terroir.

“It’s one of those words that’s like saying ‘you’re sexy’. You can be sexy because you’re a woman and for some blokes it’s as simple as that. Or, you could be sexy because you’re Deborah Harry. You know, you can’t really define what it was but god, she was amazingly attractive,” he says.

Gifford’s philosophy is to emphasise terroir. “You have to really honour the place. Try not to add too much in the winemaking process so that whatever the grapes in the climate of your site are doing, it will show in the wine,” he says.

Any winemaker can add to the wine but at the risk of losing the distinct flavour of the grapes. Gifford’s aim is to use terroir to make interesting wines for customers who agree with his philosophy.

“I think what you really aim for as a producer now is to generate a loyalty within your buyers,” he says.

Gifford is among the growing number of boutique producers spending time in the ‘old world’, Europe, to learn why European wines are the benchmark wines of the world.

“If we have strong links with where the grape is best known, is most expensive, and is most well-regarded, we could become well-regarded too”, he says.

Like Australia, California is a ‘new world’ wine region and “every man and his dog in Californian wineries end up in Bordeaux”.

Most grape varieties grown in Australia are French. Blue Poles grows merlot, cabernet franc and viognier, the best of which is grown in France. Since the French have been making wine for 2000 years, it’s no wonder they are good at it.

On 1 September this year, a 40 vintage collection of Penfolds Grange sold for $138,000, and $8,100 was paid for a bottle of 1957 St. Henri.

Auctioneer Stewart Langton says prices for Australian wine rarities this year has hit the roof.

But, he says, it’s up to today’s winemakers to lift our international image. Some producers have suggested growing trendy new grape varieties to attract consumers. After all, fashion victims can be easily convinced.

But Gifford says he believes that to make great wine, the right grapes need to be planted to suit the terroir, despite their popularity.

“If you’re going to put the money and effort into growing something, you should try and do it really well”.

Manning also hopes that business opportunities in the wine industry will be available for people enthusiastic about wine, not just dollars. Unfortunately, she knows the reality is that there may not be as many small producers in the future.

The reality of business is that big companies mean big money and big money usually wins, despite a lack of passion.

30,000Australians are directly employed in the wine trade. Many of them are like Gifford and are striving to make fine wine because they love it.

“We’re trying to make a product that we can honestly say is exciting, is intriguing, is new, but is also value for money”, he says.

Gifford thinks the solution to the wine slump is in our hands.

“Consumers, just raise your bar a little. Just be a little more interested in what you drink and that would open your eyes to a world of interesting people and places,” he says.

“With that, comes enjoyment of wine.”

Kelly Theobald is a final-year Bachelor of Journalism student at La Trobe University.  Kelly’s blog is called Music Meets Girl.