A cloud over the silver lining
The next president of the Winemakers’ Federation of Australia is to be Mr Tony D’Aloisio. His previous employment includes being chairman of the Australian Securities and Investments Commission (ASIC) and chief executive and managing director of the Australian Securities Exchange. He’s well qualified to deal with the big end of town in Sydney, the Melbourne club and government mandarins.
Having received due praise for his talent and possible future contribution from WFA vice-president Robert Hill Smith, D’Aloisio responded in kind: “I am honoured and delighted to be the federation’s next president and I am looking forward to working with the board and the CEO to deal with the key challenges which confront winemakers and this industry, an industry which is so important for Australia for jobs and export earnings.”
There then followed more accolades and important positions that D’Aloisio has held over the years. At the end of the release, in an apologetic, weary, sneaky tag-it-on-the-end sort of way, was: “Mr D’Aloisio is a director and shareholder in Oakridge Wines Pty Ltd, which holds vineyard and winery interests in the Yarra Valley in Victoria.”
True, he is a director. As for shareholder, it’s more than that. In effect, he, via the family, is the owner. David Bicknell, the winemaker and front man, has a small shareholding.
There lies the cloud. Oakridge was part of the Evans & Tate empire before it called in the liquidators in August 2007. In December that year the D’Aloisio family acquired the Oakridge Winery for an undisclosed amount. They had already acquired the vineyard the year before from the Challenger Wine Trust, which had a buy-and-lease-back agreement with Evans & Tate. Absolutely nothing improper in getting hold of a bargain from a distraught company, but perhaps not the wisest move if one happens to be the head of ASIC at the time.
Scott Rochfort, Michael West and Ian Verrender, in an article in The Sydney Morning Herald on March 31, 2011, reported: “He [D’Aloisio] concedes it is more than a weekend pastime. ‘It's a business not a hobby, and a wonderful contrast to ASIC and keeps us in touch with the joys of owning a medium-sized business,’ he said in a recent interview.”
As D’Aloisio is to become president at WFA, knowing he is running his winery as a business and not a hobby farm will bring relief to many struggling to make their wineries pay.
The cloudy part is that within a few weeks of Evans & Tate hitting the wall, ASIC, with D’Aloisio at the helm, granted the receivers Ferrier Hodgson exemption from producing financial accounts for Evans & Tate. The unanswered question is: why? The final amount owed to unsecured creditors was close to $45 million. The receivers did rather well, picking up around half a million in fees. The price the D’Aloisio family paid for the Oakridge Winery remains speculation.
There is no question whatsoever of improper behaviour by D’Aloisio or his family. However, it prompts the thought: one rule for us and another for the rest.
Waffle from WA
Apparently, according to a gushing media release, after 18 months of strategic planning the Wine Industry Association of Western Australia is renamed Wines of Western Australia – Taste Extraordinary. Along with the new wanky name there is a new website, the WA Wine Month (October) is going to become nationally relevant and there is to be a swathe of educational programs. There is a message from president of Wines of Western Australia, Redmond Sweeny, about how well WA wine is doing etc and so on. Interesting one hears a different story from the streets but, heck, let them blow the trumpet long and loud.
Blowing trumpets is fine but one likes to think it is in tune and not a screech of disjointed notes. In an article on Decanter.com this quote from Margaret River Wine Industry Association president Nigel Gallop appeared in relation to increased imports “The Australian industry now tends to focus more on quality and perhaps people are looking offshore for the cheaper stuff. My suspicion is that cheap wine is being imported for the cask market.”
Gallop’s statement about imports going into cask wine is in the realms of incredibility. Imported wine has appeared in cask but only when the domestic supply is in under supply.
For sale, maybe.
Reports in the press have indicated that Doug Rathbone, the patriarch of the family, could be putting the wine holdings up for sale at Rathbone Wine Group. It’s a good spread: Yering Station (Yarra Valley), Mount Langi Ghiran (Grampians), Parker Estate (Coonawarra) and Xanadu (Margaret River).
Son Darren Rathbone runs the wine business and although no figures are published, one would think from the success of the four brands it’s a profitable enterprise yet one report said the company lost $3 million last year after making $50 million the year before. If they do go up for sale will it be as a group or individual? Certainly Yering Station and Mount Langi Ghiran would attract a lot of interest, including from overseas. Parker Estate seems to have slipped away from the public arena, as has Xanadu, but both produce some great wines.
For sale, sold
Tyrrell’s has sold its 87-acre McLaren Vale vineyard to the Bosworth and Cameron families. The Bosworth’s are well known for their organic/biodynamic growing and production. Bruce Tyrrell confirmed the sale but little else except he was keeping a McLaren Vale brand (Rufus Stone) and would retain fruit purchases in the Vale. This implies he will be seeking fruit on the spot market rather than an arrangement to buy the fruit from the sold vineyard. The selling price was not disclosed.
Backing the Union Jack
Robert Oatley Vineyards has set up in the UK with an agent and is employing a general manager for the UK and Europe. It’s reminiscent of the early days of Rosemount but that was a long time ago and the UK market is very different. Are the wines produced today what the UK wants? Are the prices what the UK will pay? The agent, Ehrmanns, has been around for a long time and gone through several changes. Appointing a general manager (Barney Davis) is the expensive part. It will be fascinating to see if he can generate sales to cover the cost of employing him. Rosemount under Oatley ownership was going well in the UK until it got involved in two-for-£10 deals with Threshers (now also gone). It will be fascinating to see how the Oatley’s go second time around.
Pernod Ricard (PR) hoping to capitalise on the smooth, fruity characteristics of tempranillo in the UK is reminiscent of when PR was looking to attract UK consumers to the smooth, fruity characteristics of Jacob’s Creek. The “Top Drop” is slipping down the UK’s “like to drink” table. That may be more to do with price than flavour. Jacob’s Creek is doing very well in China but Australian wine is becoming passé in the UK. Sell whatever where it sells best –it makes sense – but let’s hope the Brits don’t get to love Spanish wines too much.
Simon Thomas is Pernod Ricard UK’s managing director of wine. In an interview with UK trade magazine Harpers, he said: “This is a chance to help grow the category and get new consumers, who might normally prefer New World-style wines, to start drinking Spanish wine.” He added: “Tempranillo from Rioja has the potential to achieve for Spain what sauvignon blanc has for New Zealand.”
Spain has had an image problem in the UK since the 1960s when brewers had brands including such beauties as Spanish Sauternes. Then came Rioja, and that has had a very different reputation in ways hardly related to Spain. TKR would say that the reputation of Rioja will stay ahead of Spain for some time yet. We will see.
Romancing the dragon
Chinese entrepreneurs may be buying Bordeaux and Australian vineyards but the Chinese Government is making mates with Argentina, having agreed to plans to invest US$10 billion ($9.2 billion) to improve Argentina’s transport system. This gesture is an opening to more trade between the two countries. Will wine be involved?
There’s been a lot of news coverage on Moet Hennessy becoming involved in a joint venture with the VATS Group to set up a 30-hectare vineyard in China’s Yunnan province and eventually produce a red wine. Moet Hennessy is a smart company and would have carried out extensive research, so it will have good reason for this move. TKR assumes with its portfolio of luxury brands and China becoming one of its largest markets, if the company makes a quality Chinese wine it can flog it at outrageous prices.
The wine-producing world is getting Chinese fever. A very excited media release from Wine Australia informs: “When Chinese diners want a good glass of wine they are increasingly turning to Australian brands.” It’s very good news, based on a report from the Global Trade Atlas, informing that “in the 12 months to the end of January the average price of Australian bottled wine sold in China was just three cents a litre lower than for French wine”.
James Gosper, Wine Australia’s general manager, market development, makes the pronouncement: “We have a great reputation for quality and this has struck a chord with China’s emerging middle class.”
According to Gosper, 18 per cent of Australian bottled wine sales into China are “premium”. The question is: what is premium? TKR asked and he replied, “premium in this article is above $7.50 litre or $67.50 per case,”
This counteracts that silly statement from Professor Zhangyue Zhou, director for the Centre for AusAsia Business Studies at James Cook University, who suggested Australia was selling “mostly cheap” wine in China. The facts, as taken from customs clearance for bottled imports into China in the year ended January 2012, are:
• France: US$5.96 a litre
• Australia: US$5.93
• US: US$4.36
• Italy: US$4.02
• Chile: US$3.99
• Spain: US$3.78
Awards announced in March include the top 50 global companies as chosen by a panel that Fortune magazine put together. Skipping the top 50, there are various sub-sections. The most admired beverage companies are listed below. The mark is an overall score out of 10:
• Coca-Cola: 6.69
• Anheuser-Busch InBev: 6.48
• SABMiller: 5.86
• Coca-Cola Enterprises: 5.83
• FEMSA (Fomento Económico Mexicano, S.A.B. de C.V.): 5.5
• Diageo: 5.21
Below these six another six are listed as “contenders”. Seeing Diageo at No.6 must really get under the skin of Jacob’s Creek parent Pernod Ricard, which came in at No.9 as a contender with 4.77 points. If it’s any consolation, Kirin Holdings, big daddy to Lion and controller of Petaluma, Stonier, and St Hallett etc, crept in at 12 with 4.53.
What to make of the news Robert Parker gave 19 Bordeaux wines from the 2009 vintage a perfect 100 score? Is 2009 going to be the finest of the century for Bordeaux red wine? Could this not be a little premature with 91 vintages to go? Or is it a statement to salvage the good ship Parker that seems to be becalmed on the duck pond of times past?
Interesting, and maybe cynical, that the perfect Parker points come at a time when Bordeaux prices are falling. Falling they may be but only after exorbitant increases fuelled by the Chinese. It’s being said that those lucky enough to receive the perfect Parker points have had their prices boosted more than 60 per cent.
There is no argument from TKR on the merits of the Parker 100-points system. However, we find it hard to see any wine at 100. But then perfection is in the eye of the beholder, or in this case the Parker palate. Is Parker’s palate that good? Probably not; but the sycophantic pandering to the man, from Bordeaux and American wineries, turns his points on paper into gold in their coffers. It was only a few years ago that several Australian wineries were sucking up to Parker in an embarrassingly similar manner, but now Australian wine is losing credence in the US this appears to have slackened off.
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