Major Importer of Australian Wines Trimming its Portfolio?

[KMP]

Just a week or two before we left for vacation in July I was offered deep discounts on wines from several Australian producers including J P Belle Terroir, Kay Bros, and Rusden. The reason given for the deep discounts was that the distributor was dropping these wines. I bought a few 6-packs and thought nothing more about it. Then today a thread on eRobert Parker’s Bulletin Board has become embroiled in a discussion about how many producers Dan Philips of Grateful Palate, a significant importer of Australian wines, is dropping from its portfolio. Guess who imports J P Belle Terroir, Kay Bros, and Rusden?

The discussion was started by Michael D Opdahl of Joshua Tree Imports claiming that Grateful Palate would be dropping all non-owned brands and focusing on the "R" portfolio. He suggested that some 18 brands would be dropped. This was challenged by Jay Miller (who now reviews Australian wines for Parker’s Wine Advocate) and Michael Twelftree of Two Hands (Barossa) but their claim was simply that Grateful Palate would not just focus on R wines, not whether it was dropping any wines. Opdahl came right back claiming that his source is someone who works for Grateful Palate. And that the non-R brands being kept include Kalleske, Kays, Tscharke, Noon, Greenock Creek, Majella and probably a couple of others. At present its anyone’s guess as to what brands are being cut but the list of producers imported by Dan Philips is long and includes many small wineries that make some outstanding wines. A sampling on the website includes Burge Family, Glaymond, Tim Smith, Scarpantoni Estate, Shirvington, Samuel's Gorge, The Willows, Tim Smith Wines, as well those mentioned above.

The reason for this possible slashing of products is not clear, but both Opdahl and John Gorman (Southern Starz) have contributed lengthy posts on the current difficulties being experienced by those trying to sell Australian wine into the US market; “Australia is one seriously screwed up wine category right now and desperately in need of a major make over.” John Gorman.

Mike

[KMP]

Just as an addendum: I've been told that Rusden moved on from GP a few months ago. But the fact that distributors are moving stock at significant discounts (I got a 50% price cut) shows just how hard it is becoming to move some Australian wines. And these aren't just any wines - Parker gave some of these wines scores in the mid-90's - but these wines are not being snapped up like they used to be.

Mike

[Dave Dewhurst]

Exchange rate can't be a good thing:

2002 - 1AUD = 0.49USD

July 2008 - 1 AUD = 0.98USD.

Doubles the price let alone anything else!

Cheers

Dave

[GraemeG]

... (I got a 50% price cut) shows just how hard it is becoming to move some Australian wines. And these aren't just any wines - Parker gave some of these wines scores in the mid-90's - but these wines are not being snapped up like they used to be.
Mike

Trouble is that Parker seems to give mid-90s scores to a lot of Oz wines that are pretty one-dimensional. They're not likely to engender much in the way of repeat purchases, except for only the most undemanding buyers. And his obsessive focus on Barossa & McLaren Vale as being almost the only regions worth bothering with doesn't help either.
The FX rate doesn't help, of course, nor does the fact that Parker has passed Oz on to Millerman. Overall, though, it probably just reflects the fact that possibly unworthy wines have been sold for too long for too much money.
There's nothing wrong with those 'undemanding' buyers as a market worth chasing, but I reckon you'd have to do it at pretty competitive prices, which clearly wasn't happening.
cheers,
Graeme

[Boyeah]

Exchange rate can't be a good thing:

2002 - 1AUD = 0.49USD

July 2008 - 1 AUD = 0.98USD.

Doubles the price let alone anything else!

Cheers

Dave

July 2008 1 AUD =.98USD
Aug 2008 1 AUD =.87USD
Sep 2008 1 AUD =.83USD ?
Oct 2008 1 AUD = ???

Can't use the lowest compare with the peak it is far too extreme.
Lets stick to the wine topic.
The silver lining of this is perhaps we can enjoy cheaper Rusden from now on, I love their black guts and their Full Circle Mataro.
Cheers
Boyeah

[JDSJDS]

It's an interesting discussion on the ebob thread refered to in the first post. Who would have thought that the Oz wine market could have grown so quickly only to nosedive just as quickly?

Well, I guess hindsight says that 'what comes up must come down', and Oz producers relied upon inflated Parker scores to move their wines without really ever generating any brand loyalty. The consolidation of the industry in Oz is also an incredible mess, as many brands no longer exist or use different sources for grapes.

The real shame is that non Barossa/McLaren Vale wines (and wines other than shiraz) still seem to be 'wine non grata' in most of North America wine stores. And the prices are still increasing.

Our monopoly just brought in a huge selection of Mollydooker wines, and they thwy put bottle limits on them, expecting them to fly off the shelves due to the insane Jay Miller scores. But they are still sitting on the shelves...

Spain, Chile and Argentina seem to be the countries who have taken upo the slack in terms of cheap ($10-20) wines.

[JamieBahrain]

I think the AUD is a significant factor. The other being the sameness of Parker inflated wines that in my experience don't age.

The Italians are taking a bit of a hit too. It is a reccessionary market.

Interesting the evolution in the next cycle.

[Wycroft]

Hmm, will NZ suffer the same fate? I know increasing numbers are counting on the US to be their saviour.

[Craig(NZ)]

Comparably few top NZ wines are driven by ratings hype and the winds of wine fashion??

Yes you have new entrants come into the market, but the rise and fall of labels here seems to be a slower process than that inflicted on say cult SA Shiraz?

Dunno, just a feeling. I may be wrong and have the blinkers on but thats the flavour i get.

[JamieBahrain]

I think the Kiwis are in a great position. When their currency was at record levels they seemed to be doing very well with whites- stitching up the under 15USD market with a perception of good quality and uniqueness ( sav blanc ).

Their reds are relatively well poised, though somewhat niche.

Sav blanc will be the toast of Asia this next cycle I reckon.

[Wayno]

Nestled in alongside 1st growth Bordeaux and super seconds....

[Ratcatcher]

I think premium wine has been an overpriced commodity for the past 10 years. Both the US and AUS have been going very well economically and people have had plenty of excess disposable income.

Now that the economies have started to correct themselves, luxuries like > $30 wine is one of the first things to go in a person's budget.

As Graeme said - it probably just reflects the fact that possibly unworthy wines have been sold for too long for too much money.

Perhaps some chickens will be coming home to roost for some of the people who got too greedy.

[smithy]

This has been coming for a long time.
2 factors at play.
The Aussie $ hitting 0.95 US.
Scared the crap out of importers.
The other is the OVER-reliance on the US of Spectator points.
Parker ratings were/are just TOO much relied on.
I could see Parkers liking for big very soft reds (lacking acid) would lead to a backlash on Aussie reds. Especially with a % of Grenache.
Too often these wines just wouldn't live....the US purchases said they didn't like them with a bit of age on them.....and Aussie red's reputation went south.
Worst still was the hype ..as if by definition they must have been great.
Parkers tasting system...with importers and winemakers leaves a lot to be desired as far as scientific method.
I said all this to our US agent at the time.
A few years later I think he'd agree with me.

You get what you deserve sometimes.

[KMP]

For those wanting to know just who is in and who is out of the Grateful Palate portfolio here are the lists as noted in letters by Dan Philips to GP distributors and suppliers.

Those being kept:
Ashton Hills Vineyard, Ballycroft Vineyards, Battley, Buckshot Vineyard, Burge Family Winemakers, Clarendon, Glaymond, Greenock Creek, Hare’s Chase, Hazyblur, Hobbs Wines, Kalleske/Pirathon, Kay Brothers Amery Vineyards, Lengs & Cooter, Lillypilly, Loan Wines, Majella, Noon Winery, Paringa, R Wines, Red Edge, Ringland Vitners, Rudderless, Samuel’s Gorge, Schutz Barossa, Tim Smith Wines, Trevor Jones, Tscharke, Whistling Eagle, William Downie, The Willows Vineyard

Those out:
Betts & Scholl, Cape D’Estaing, Clos Clare, Digger’s Bluff, Geoff Weaver, Gibson, Henry’s Drive, Hutton Vale, Lashmar, Longhop, Lunar, Mclean’s Farm, Nurioopta High School, Old Plains, Oliver’s Taranga, RBJ, Rockford, Rusden Wines, Scarpantoni, Shirvington, Silesian, Teusner, Torzi Mathews, Troll Creek, Two Way Range, Wild Duck Creek Estate

For this group Philips wrote:-

Some of these departed months ago, others in the past days or weeks, but all have been exiled to wine Siberia and will no longer enjoy life in the Distributor Collective of Fine Wines at The Grateful Palate.

Now I wonder what "wine Siberia" means?

Mike

[DaveB]

For those wanting to know just who is in and who is out of the Grateful Palate portfolio here are the lists as noted in letters by Dan Philips to GP distributors and suppliers.

Those being kept:
Ashton Hills Vineyard, Ballycroft Vineyards, Battley, Buckshot Vineyard, Burge Family Winemakers, Clarendon, Glaymond, Greenock Creek, Hare’s Chase, Hazyblur, Hobbs Wines, Kalleske/Pirathon, Kay Brothers Amery Vineyards, Lengs & Cooter, Lillypilly, Loan Wines, Majella, Noon Winery, Paringa, R Wines, Red Edge, Ringland Vitners, Rudderless, Samuel’s Gorge, Schutz Barossa, Tim Smith Wines, Trevor Jones, Tscharke, Whistling Eagle, William Downie, The Willows Vineyard

Those out:
Betts & Scholl, Cape D’Estaing, Clos Clare, Digger’s Bluff, Geoff Weaver, Gibson, Henry’s Drive, Hutton Vale, Lashmar, Longhop, Lunar, Mclean’s Farm, Nurioopta High School, Old Plains, Oliver’s Taranga, RBJ, Rockford, Rusden Wines, Scarpantoni, Shirvington, Silesian, Teusner, Torzi Mathews, Troll Creek, Two Way Range, Wild Duck Creek Estate

For this group Philips wrote:-

Some of these departed months ago, others in the past days or weeks, but all have been exiled to wine Siberia and will no longer enjoy life in the Distributor Collective of Fine Wines at The Grateful Palate.

Now I wonder what "wine Siberia" means?

Mike

It's just North of Wine Mongolia Mike

[Michael McNally]

Those out:
Betts & Scholl, Cape D’Estaing, Clos Clare, Digger’s Bluff, Geoff Weaver, Gibson, Henry’s Drive, Hutton Vale, Lashmar, Longhop, Lunar, Mclean’s Farm, Nurioopta High School, Old Plains, Oliver’s Taranga, RBJ, Rockford, Rusden Wines, Scarpantoni, Shirvington, Silesian, Teusner, Torzi Mathews, Troll Creek, Two Way Range, Wild Duck Creek Estate

Wonder how long before some of these begin appearing at Grays?

If it any comfort to the purveyors of these labels, some of Russia's greatest and brightest were sent to Siberia! Some even returned.

[DaveB]

Those out:
Betts & Scholl, Cape D’Estaing, Clos Clare, Digger’s Bluff, Geoff Weaver, Gibson, Henry’s Drive, Hutton Vale, Lashmar, Longhop, Lunar, Mclean’s Farm, Nurioopta High School, Old Plains, Oliver’s Taranga, RBJ, Rockford, Rusden Wines, Scarpantoni, Shirvington, Silesian, Teusner, Torzi Mathews, Troll Creek, Two Way Range, Wild Duck Creek Estate

Wonder how long before some of these begin appearing at Grays?

If it any comfort to the purveyors of these labels, some of Russia's greatest and brightest were sent to Siberia! Some even returned.

I don't think thats going to happen. A few of those listed had already bailed out and others were rumored to be about to jump ship......

[Michael McNally]

Wonder how long before some of these begin appearing at Grays?

If it any comfort to the purveyors of these labels, some of Russia's greatest and brightest were sent to Siberia! Some even returned.

I don't think thats going to happen. A few of those listed had already bailed out and others were rumored to be about to jump ship......

The Grays crack was a joke Dave. I can't really imagine piles of Basket Press being flogged off at $60 a case (I wish).

[KMP]

Wonder how long before some of these begin appearing at Grays?

If it any comfort to the purveyors of these labels, some of Russia's greatest and brightest were sent to Siberia! Some even returned.

I don't think thats going to happen. A few of those listed had already bailed out and others were rumored to be about to jump ship......

The Grays crack was a joke Dave. I can't really imagine piles of Basket Press being flogged off at $60 a case (I wish).

Rockford is one of the producers where Grafeful Palate still has remaining inventory - now whether that means Basket Press is another matter.

Mike

[DaveB]

Wonder how long before some of these begin appearing at Grays?

If it any comfort to the purveyors of these labels, some of Russia's greatest and brightest were sent to Siberia! Some even returned.

I don't think thats going to happen. A few of those listed had already bailed out and others were rumored to be about to jump ship......

The Grays crack was a joke Dave. I can't really imagine piles of Basket Press being flogged off at $60 a case (I wish).

Rockford is one of the producers where Grafeful Palate still has remaining inventory - now whether that means Basket Press is another matter.

Mike

For their sake, I hope they don't do what they did with the Rusden wines at retail in the U.S.

[KMP]

Dave,

From what I understand Rockford hasn't been in the US market for almost a year (maybe even longer) - apparently they have enough trouble supplying the Oz market and I don't think they have any plans for growth.

From my experience with sales of wines from the GP portfolio its likely that there will be big discounts for any remaining inventory. The J P Belle Terroir, Kay Bros (Hillside Shiraz), and Rusden (Ripper Cab - talk about a funky wine) that I was able to get came at about 50% discount. A similar thing happened with the split between the Marquis' and Philips over Marquis-Philips - the fire sale saw 50% reduction in prices pretty much across the board by a number of retailers.

Mike

[smithy]

Siberia="frozen out of the US market".
Expect some discounts on the stuff in Siberia.
GP gets good points.
Don't expect them to share this with those on the outer.

[JohnP]

It is little wonder that GP is dropping wineries. Obviously, the dollar and other economic factors have, and will continue to play a major part. However, the R Wines exercise is not a small venture and there are not just a few wines in the catalogue. When I saw, and tasted some of, the catalogue late last year there were 20 plus wines. Most are pretty ordinary, but they cover a very wide range of price points and have the Chris Ringland name to add credibility. The Chris Ringland Shiraz mail list is now managed by R Wines, so its a pretty tight relationship. My own assessment is that wineries have been moved out to make way for the R Wines range in the first instance. Economics is a secondary excuse. Just a point of view!