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Australian winemakers take aim at U.S.
Chicago Tribune ^ | 05/25/2003 | Corie Brown

Posted on 05/28/2003 5:51:18 PM PDT by cherry_bomb88

Quietly and with stunning speed the Australians are invading the United States--with wine. Following a detailed production and marketing plan, and taking aim at California's place in the wine market, Australia is about to pass Italy as the No. 1 supplier of imported wine in America. The Australians are leveraging their dramatically lower costs of production to catapult themselves forward at a time when American vintners are struggling to stay afloat in a worldwide glut of wine. With 90 percent of the Australian imports to the U.S. priced between $6 and $11 a bottle, this segment of the wine business--already the most competitive--is turning into a slugfest. Until the 1970s, Australia specialized in low-class, high-alcohol wines and even 10 years ago, it exported only a trickle of its premium varietal wines to the U.S. What they lacked in posh pedigree and experience, the Australians have made up for in moxie, staking their future on an uncompromising premise: delivering better wine cheaper than California. It was a plan born of necessity by ambitious vintners eager to grow beyond what Australia's small population of 19 million people could support. With an all-for-one unity unheard of in the California wine country, Australian vintners locked arms with each other and the Australian government in the mid-1980s, determined to become major players in the world of wine. In 1991, they set an audacious goal of increasing exports to $622 million by 1998 from $112 million. Reaching that benchmark years early, their next plan called for $1.6 billion in export sales by 2025. Last year, Australia recorded $1.4 billion in wine exports. "Unity has been our competitive advantage," says Sam Tolley, chief executive of the Australian Wine and Brandy Corp., the government-industry organization responsible for the seemingly contradictory jobs of regulating and marketing Australian wine. "It's a bit of a strange model," Tolley says, but it's not unusual in Australia. "The government has always encouraged exports." That doesn't mean plentiful government subsidies, he says. Rather, the firms came together and voted a tax on themselves to create a government organization to help them grow. As their needs have expanded, Tolley says wine companies have voted to increase those taxes. Under the leadership of the Australian Wine and Brandy Corp., Australia's vineyard land has more than doubled in the last 10 years. Instead of investing in more of the Semillion favored by Australian drinkers, the corporation encouraged growers to plant Chardonnay. Acreage devoted to Australian Shiraz, another grape the group believed would appeal to American drinkers, was increased. The under-$10-a-bottle wine buyer was the target. In that price range, it was determined that red wines should deliver a mouthful of berries, fruity but not too sweet, and be blended for a consistent, even taste. The white wines should be light on the tannins with the bumps blended away. Marketing Australian wine has always been a road show. From the earliest days in the mid-1980s when Rosemount was the only Australian brand available in the U.S., wine companies have gone town to town to peddle their wines to those willing to experiment with the unknown. That grass-roots approach continues. "The Australians offer good values across the board," says wine industry consultant Jon Fredrikson. At every price point, he says, consumers are finding better quality Australian wines when compared with California's. Unlike American and European vintners, who believe a wine's taste should reflect the place it is grown, the Australians are proud of their blends, says Kylie Hargreaves, Australia's deputy consul general in Los Angeles. She and other Australians talk about their wine's consistent, "smooth" qualities, flavors that don't vary dramatically by vintage. "People in the wine industry in Australia sat down with consumers and asked them what they like. And guess what? They like wines a bit sweeter and with less bite," says Jim Watkins, the top U.S. executive with Australian-owned Beringer Blass Wine Estates. "Words like `austere' and `complex' don't even come up" when you talk to consumers, says Tom Burnet, president of the U.S. unit of Southcorp, Australia's largest wine company. All of this reflects a fundamental difference between Australia and the U.S., say wine industry analysts. American vintners take themselves and their wine very seriously, largely selling wine through snob appeal. The Australians, who drink three times as much per capita as Americans, aren't so precious about pulling a cork. "We don't take ourselves too seriously," says John Larchet, an Australian wine importer with offices in Melbourne and San Diego. Savvy American wine companies are jumping on the Australian bandwagon, creating joint ventures that marry cost-effective Australian wine production with American distribution and marketing. Venturing abroad is nothing new for U.S. wine companies, which already own vineyards in Chile, parts of Europe and New Zealand. In fact, every major U.S. wine company is working on a business relationship with an Australian vintner.

(Excerpt) Read more at chicagotribune.com ...


TOPICS: Business/Economy; Culture/Society; Foreign Affairs; Miscellaneous; News/Current Events
KEYWORDS: australia; deficit; economy; export; import; trade; wine
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That doesn't mean plentiful government subsidies, he says. Rather, the firms came together and voted a tax on themselves to create a government organization to help them grow. As their needs have expanded, Tolley says wine companies have voted to increase those taxes.

What a concept!!!!!!!!!!!!!! How can they survive without government subsidies!?!? (note sarcasm)

1 posted on 05/28/2003 5:51:18 PM PDT by cherry_bomb88
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To: cherry_bomb88
Do they mean a governing organization, not a government organization?
2 posted on 05/28/2003 5:57:27 PM PDT by CountryFinishes
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To: CountryFinishes
That's what it read like to me....an "association" and the "self created taxes" are merely dues to run that association.

Ya' think the dems would understand that concept?

3 posted on 05/28/2003 6:01:04 PM PDT by cherry_bomb88 (I'm normal....it's the rest of the world that's crazy!)
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To: cherry_bomb88
I can imagine few things greater than a glut of good wines. Ever since Greg Norman came unglued during the final round of Jack Nicklaus' fifth Masters win, I've felt indebted to the Shark. So we recently tried of bottle of Greg Norman Estate's Cabernet Merlot 1996 with some great steaks. Being a blend, it was purchased on a lark -- but the wine was actually very good.

Please send us more from Down Under...

4 posted on 05/28/2003 6:07:12 PM PDT by Always A Marine
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To: Always A Marine
Ah, make that Greg Norman Estates' Cabernet Merlot 1996. Gotta place those apostrophes...
5 posted on 05/28/2003 6:12:29 PM PDT by Always A Marine
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To: cherry_bomb88
...an "association" and the "self created taxes" are merely dues to run that association.

,,, an industry approved and created levy for self development. South African producers have run Ko-ops for years, but I'm uncertain whether they're tied to a government body like this model here. Certain healthy synergies can develop between government and exporters in an environment like this - where development meets a regulatory environment. The track record seems to speak for itself.

6 posted on 05/28/2003 6:13:31 PM PDT by shaggy eel
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To: cherry_bomb88
I noticedthe other day that I was hearing an awful lot of ads for Aussie wines. hee hee hee Those Aussies know how to tell the Frogs to HOP OFF.
7 posted on 05/28/2003 6:15:38 PM PDT by fightinJAG
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To: cherry_bomb88
A "tax on themselves" isn't really a tax at all, it's a voluntary contribution to an industry cartel. Which is OK, I guess, but let's not pretend that the vintners are paying anything - they get all of their money from people who buy wine. They can charge whatever the market will bear and do with the money whatever they want, and as long as guys like me will pay it to pour that lovely, velvet Barossa valley nectar in my glass, who cares? But "innovative" is laying it on a bit thick, IMHO...
8 posted on 05/28/2003 6:18:11 PM PDT by Billthedrill
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To: cherry_bomb88
In the $10 bottle price range, Rosemount Shiraz beats the pants off of any comparble U.S. wine, IMO.
9 posted on 05/28/2003 6:21:09 PM PDT by Rebelbase (........The bartender yells, "hey get out of here, we don't serve breakfast!")
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To: Always A Marine
I've got a bottle of that...I haven't tried it yet....I may open it...I hope it's good.
10 posted on 05/28/2003 6:21:15 PM PDT by mystery-ak (The War is not over for me until my hubby's boots hit U.S. soil)
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To: cherry_bomb88
Australia has some mighty good stuff.

BTW, paragraphs are our friends.

11 posted on 05/28/2003 6:22:11 PM PDT by Principled
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To: cherry_bomb88
(Check out this thread)
12 posted on 05/28/2003 6:27:03 PM PDT by ChefKeith (NASCAR...everything else is just a game!)
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To: cherry_bomb88
I can never think of Australian wine without remembering the Monte Python skit about it. I remember one of the characters saying that a particular Australian wine "had a bouquet like an aborigine's armpit." Anyone have a url for that text?
13 posted on 05/28/2003 6:29:53 PM PDT by Tacis
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To: cherry_bomb88
Australian wines are welcome here. In our boycott of French products we advocated the switch to California, Australian and Spanish wines. I disagree that Australian wines are better than California's. But they are cheaper and a good value. Let's continue to support Australia in every way we can.
14 posted on 05/28/2003 6:30:51 PM PDT by Mihalis
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To: Always A Marine
Penfold's rocks.

15 posted on 05/28/2003 6:32:36 PM PDT by eno_
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To: ChefKeith
And what the heck... check this out also JT's Liquors

We stock some of these wines.And the ones We don't have We will order them in for local FReepers.

16 posted on 05/28/2003 6:33:50 PM PDT by ChefKeith (NASCAR...everything else is just a game!)
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To: Rebelbase
I agree with Rosemount Shiraz. Excellent wine for the price. I believe Wine Spectator gave the 2000 vintage a 90 rating (for those who follow such things). I've gone through cases of it over the past few years. They make good Cabernet wines too. I drink a lot of Australian wine and have rarely been disappointed.

Certainly makes it a lot easier to avoid French wines.

17 posted on 05/28/2003 6:48:13 PM PDT by SamAdams76 (Back in boot camp! 264 (-26))
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To: Rebelbase
In the $10 bottle price range, Rosemount Shiraz beats the pants off of any comparble U.S. wine, IMO.

I had a glass with dinner at Outback tonight. Wonderful.

18 posted on 05/28/2003 6:49:23 PM PDT by mombonn (Have you prayed for our President yet today?)
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To: Rebelbase
I'll second the comments on the Shiraz. Best with freshly grilled Black Angus Texas Steak.
19 posted on 05/28/2003 6:54:16 PM PDT by TEXASPROUD
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To: mystery-ak; Rebelbase
In the $10 bottle price range, Rosemount Shiraz beats the pants off of any comparble U.S. wine, IMO.

I've got a bottle of that...I haven't tried it yet....I may open it...I hope it's good.

Open it. It's good.

I sampled Australian wines about 10 years ago, could only find two or three labels at the local "Trader Joes." Now, they have their own section, and are sprouting up in local supermarkets.

The Aussies have done good for themselves. I've switched, no more Calif. wines for me (on purpose).

Cheers Mate!

20 posted on 05/28/2003 6:56:29 PM PDT by kstewskis ("Go to your room!"....Dan Rowan to Dick Martin)
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