Great Trouble at Top End article TORB!

[Max]

Great work Ric! Very well written and well done for unearthing the facts and figures on one very pertinent topic!

[Gavin Trott]

Great work Ric! Very well written and well done for unearthing the facts and figures on one very pertinent topic!

Can but agree.

A very interesting and well written piece.

[Baby Chickpea]

Nice write up but would also add the aggressive myopia of many small 'cult' or faddish/trendy Aussie wineries are equally to blame (not naming them ). Those who have rewarded their Australian subscriber base (with realistic allocations) and faithful loyalty have ensured success by continually selling out their production annually. So bravo to the likes of Kays Amery, Noon, Wild Duck Creek and Rockford who have never lost sight of their Aussie base and kept price increases realistically in check (largely) despite heightened awareness and increased overseas demand. That's why I will support these wineries year in, year out.

[TORB]

Thanks for the kind words Max and Gavin.

Danny, you are dead right about the points you make in your email; the guys that are looking after their customer base in Oz are to be applauded and those that are just out to make a quick buck certainly don't deserve any loyalty at all.

[JamieBahrain]

Good article Torb and in my observation it's going to get worse.

From an Asian perspective, Oz wine is cooking on shelves in this region, unsold and supposed premium labels, in the thousands upon thousands of bottles.

I am buying some 'boutique' Australian wines in Hong Kong, with it's flat 80% wine tax, cheaper than cellar door in Australia.

The high AUD will kill exports off further.

[Maharishi]

Yep. The winejournalism in Torbsite has improved tremendously. More "thinkering" and less bickering.
Kudos to his selfless service to the consumers!

[KMP]

I must admit that I have not been keeping pace with current wine related events here in the USA due to an over abundance of work in other areas. But in some respects I'm not surprised by the findings although I guess I'd like to have a little more of an idea of what is considered the top end of the market and who is selling it in the USA.

Ric's piece notes that "there was a forty one percent reduction in the shipments of Aussie wine to the US last year in the category that AW&B measure as the A$7.50/litre category, (this translates to the over US$20 retail category)". At current exchange rates $7.50AUD is about $5.60 USD. So to put such wine in the $20USD category is quite a markup - some wines that cost $20USD include Schild Shiraz 2003 $19.99, Tim Adams Shiraz 2002 $19.99, Box Stallion Shiraz 2003 $18.99, Evans and Tate Shiraz 2001 $19.99. And there are a number of quite good wines that cost much less - link.

Another point that I would like clarified from the article is who are the retailers who are dealing in the top of the market in Aussie wines and how their business is being influenced by wholesaler? In my experience in San Diego the large supermarket chain stores deal mainly in the lower end of the market. Costco would be one of the few chains that deals with high end product, and in terms of Australia that is quite limited and ever changing.

In my experience most of the top end of the market in Aussie wine (in San Diego) is sold in fine wine stores, by individuals with considerable experience and in some cases the drive to seek out value and scarcity for their clients.

However it is true that a number of Aussie wines do receive considerable price increases once they reach these shores. A recent example has been the Kalleske wines that have gone for quite high prices - the 2002 Greenock Shiraz was fought over for prices approaching $100/bottle. Its interesting to note that the retailer that I bought the 2004 from still has the wine for sale at $55/bottle - that would not have happened two years ago. The driving forces pricing these wines seems to be availability and Parker scores (and distributor greed).

In terms of the near $20USD category. On a recent visit to Ireland I purchased some very reasonable "Old World" wines for about $18USD/bottle from a Wine Buff shop. I asked whether they had any Aussie Shiraz. The answer was No! And judging by this they won't be selling any anytime soon.

Mike

[smithy]

I'd have thought a backlash against Aussie wines at the top end was inevitable.
With the US markets reliance of RPJ especially at the top end. the backlash isn't so much against Aussie wines , its against a system that promises the world for some of these wines that IMHO are just not up to it.

I've seen a fair bit of negative stuff as well about Aussie wines falling apart after a few years. What I would say is that a lot of top end stuff made for the US market lacks acid and/or has a fair Grenache component.
Both soften wines well but aren't good for long term ageing.

Really the backlash should be aginst the RPJ system, but I don't think our freindsd across the water would think about that.

Cheers
Smithy

[Lincoln]

What I would say is that a lot of top end stuff made for the US market lacks acid and/or has a fair Grenache component.
Both soften wines well but aren't good for long term ageing.

Poor old Grenache, getting a beating again Grenache can be ageworthy - is it perhaps just that Australians just don't choose to use it in that way? Most people don't cellar wines, so are winemakers just making wines that are ready to drink, even the top end stuff. Australian wine = drink now.

[KMP]

Well I certainly don't want to be one across the water who defends Parker. But I think its probably important to define the terms that are being used. I don't drink at what I define as the top end of the market. I have not done the math but I would doubt that my average cost per bottle for wine is over $30-35USD, with a range of about $8 to $80. However I do taste at the high end. Now whether that is the top of the market that Ric is talking about is not clear.

The problem, of course, is that when you have folks like me spending $30USD on a bottle of (red) wine here in San Diego you have to remember that for that amount of money you don't get much in the way of top end Bordeaux or Burgundy or California Cabernet. You have to pick from the mid-range Syrah and Pinot or from Zinfandel or from South America, or Italy. (No cards and letters please, I'm talking in general terms here - there are always exceptions.)

Whether the drop in favor of Aussie wines is a Parker problem is not really clear - he still gives quite a few wines big scores and people still chase points. Value for money may certainly be playing a role but its not as if Aussie wines are the only ones that suffer distributor greed.

I believe that the real problem is that most Aussie Shiraz (for example) taste very similar (structurally sound with dark fruits and vanilla) and so the serious drinkers are learning that here is no point in collecting a bunch of different wineries. They are learning to be more selective in their choices.

Mike

[KMP]

Interesting little addendum to this topic can be found here. Two points I found interesting -

"Above $20, California has a tremendous foothold in the market, and the quality is continuing to improve," said Deutsch. "I believe that domestic wines are going to continue to have some real competition under $20 from imported wines, though. We believe in the domestic industry and we think that domestic wines will continue to be very successful, but we also believe there is going to be a growing place for imports as well." Deutsch is president of importer W.J. Deutsch & Sons, whose multinational portfolio includes Australian brand Yellow Tail, as well as wines from France, Spain, Italy, New Zealand, Chile, the United States, etc.

....New Zealand is the only major importer of wine that has been able to maintain an average bottle price above $10. Currently, New Zealand averages $10.61 per bottle of wine sold, well above the $6.73 overall average imported bottle price. ...., although its a very small share of the market.

Mike

[Ratcatcher]

I seriously question the QPR of any AUS wine over $60.

I reckon the reason there is trouble at the top end is that we have lost credibility.

There are too many wineries/companies who have jumped on the bandwagon worried about missing out on a short term easy profit rather than maintain a long term reputation with their more loyal customers - particularly the ones here in AUS.

When you add to that the fact that the prices keep creeping up even in lesser vintages then eventually the punters are gonna catch on that they aren't getting value for money.

See also Brian's comment in the $20 - $40 price range thread.

[platinum]

I agree with you. You can get some Gems for under or even around $60 from great vintages that will cellar a while too. It just makes me not even look at wines that have price rises in lesser years 2003 RWT being a great example. As I read on here and in other Forums; I just support the producers doing the right thing like many others are doing, Saltram, Majella, Noon, Seppelt are some examples

[JDSJDS]

I believe that the real problem is that most Aussie Shiraz (for example) taste very similar (structurally sound with dark fruits and vanilla) and so the serious drinkers are learning that here is no point in collecting a bunch of different wineries. They are learning to be more selective in their choices.

I agree with KMP. While there are a few wines outside the normal Barossa/McLaren Vale 'box' to be found in Canada, they are few and far between.

Also, as a luxury item, fine wine buying is inherently a cyclical process. Oz wines were hot for several years, but the tide seems to have turned now, in large part to the elevated prices asked from the high Parker point producers. And there are other baubles that have attracted the fickle attention of fine wine buyers (e.g., CA pinots and syrah, Austrian gruners and rieslings). For example, the 2004 Amon Ra came into BC recently - at $85. While I'm sure it's an excellent, well made wine that I would enjoy, I also know that there's a 0% chance I'll be buying at that price.

[TORB]

I too but very little over $60 these days; sure there are a few purchases of "special wines for special occasions" but these have to be wines that will age well and improve.

There are so many good wines under that price, there is no need to go over it (often.)

There is also so much over priced wine in the $40-$60 bracket its not funny; producers with delusions of adequacy.

[Alan Rath]

I believe that the real problem is that most Aussie Shiraz (for example) taste very similar (structurally sound with dark fruits and vanilla) and so the serious drinkers are learning that here is no point in collecting a bunch of different wineries. They are learning to be more selective in their choices.

Precisely! Without being completely flippant, I could load up right now on 2002 389 and cover most of my Aussie bases for 10-15 years (But instead I've been cherry picking some mid-90s Dalwhinnie Shiraz at prices of $15-25).

Seriously, Mike's exactly right. Sure the "top end" wines don't all taste exactly the same, but after sampling through a good fraction of them over the past several years, I now know I don't need to do that any more. Just put a couple of reliable, fairly priced wines (say, Turkey Flat) in my cellar every year and be done with it. Here's another problem for Australia here in the US: California Syrah has really mounted a challenge over the past 5 years. Where a decade ago you could probably count the number of really good Syrah on one hand, there are now dozens of producers specializing in Syrah, many if not most making excellent wines - and guess what, they are made in a wide range of styles, from ultra ripe to almost northern Rhone. Although I still like drinking a good Aussie Shiraz, I just don't need them the way I used to with the expansion of the available California wines.

Regards,
Alan

[Red Bigot]

I believe that the real problem is that most Aussie Shiraz (for example) taste very similar (structurally sound with dark fruits and vanilla) and so the serious drinkers are learning that here is no point in collecting a bunch of different wineries. They are learning to be more selective in their choices.

Precisely! Without being completely flippant, I could load up right now on 2002 389 and cover most of my Aussie bases for 10-15 years (But instead I've been cherry picking some mid-90s Dalwhinnie Shiraz at prices of $15-25).

Seriously, Mike's exactly right. Sure the "top end" wines don't all taste exactly the same, but after sampling through a good fraction of them over the past several years, I now know I don't need to do that any more. Just put a couple of reliable, fairly priced wines (say, Turkey Flat) in my cellar every year and be done with it. Here's another problem for Australia here in the US: California Syrah has really mounted a challenge over the past 5 years. Where a decade ago you could probably count the number of really good Syrah on one hand, there are now dozens of producers specializing in Syrah, many if not most making excellent wines - and guess what, they are made in a wide range of styles, from ultra ripe to almost northern Rhone. Although I still like drinking a good Aussie Shiraz, I just don't need them the way I used to with the expansion of the available California wines.

Regards,
Alan

My take on this is that many (most?) of the premium Oz Shiraz exported to the US are / were aimed at Parker points and therefore have a certain sameness about them, especially the Barossa and McLaren Vale examples. They had a novelty value for a while, no one else got this sort of fruit and concentration into a bottle, but as you said, the novelty wore off as some of them didn't live up to the hype and quickly became flabby and they aren't wines that suit many styles of food other than rare red meat.

Without knowing the "good fraction" of wines you've tried over the past few years, there is a very wide diversity in styles of Shiraz across the country, probably more diverse than in California?
eg Hunter, NSW Hilltops, Northern Victoria, Glenrowan, Nagambie, Beechworth, Pyrenees, Grampians, Yarra, Sunbury, Heathcote, Bendigo, Coonawarra, Langhorne Ck, Adelaide Hills, Clare, Margaret River, Mt Barker, Great Southern all produce Shiraz that can be and often are distinctively different to the "common" Barossa and McLarenVale styles. Even in the Barossa and McLarenVale there is a wide variety of styles from old and new makers, but you have to look a bit harder to find them.

I hesitate to point this out, because if the marketing people start to make an impact on selling this diversity in Australian Shiraz, the wines I like may become scarce and more expensive. I think I'm pretty safe for a while though, no one will have any spare money after buying 2005 Bordeaux and the current Stock Market downturn.