Despite murmurs from within the industry of the wine surplus reducing and stocks returning to balance one has to wonder at the harm being done by dumping excess stock overseas.
The measure is, of course, the price per litre and whether it’s dumping at below production cost of both grape growing and winemaking. $1 a litre is the often quoted magic profit/loss figure, although it is possible for a few to grow grapes and produce wine for bulk export at 85 cents litre.
Therefore, what is to be made of the 10 million litres of red wine exported to Canada at 76 cents a litre and 5 million litres of white wine at just 53 cents a litre? In the past year around 84 million litres of wine have gone into export markets at 80 cents a litre or less.
Getting rid of surplus maybe but what long term damage is this wine going to do the reputation of Australian wine?
A huge problem the industry is not facing up to as strongly as it should is increased taxation based on health and violence issues alcohol is said to cause. It’s not just domestic but a growing global issue. The Winemakers Federation of Australia (WFA) is putting forward an argument that wine is a less harmful form of alcohol and therefore to be treated differently
Stephen Strachan CEO of WFA: There is considerable evidence of a significantly lower risk profile for wine consumption compared with other alcoholic beverages, and we have a strong track record in terms of responsible advertising. WFA will never give away any of that high ground or succumb to the "alcohol is alcohol" campaign.
One may agree with the logic but a recent study, conducted by the Australian National Drug and Alcohol Research Centre (NHMRC), has very neatly nipped it in the bud. They say alcohol abuse does not refer specifically to how much someone drinks but instead reflects the impact such alcohol consumption is having on their life. Alcohol abuse (18 percent) is defined as ‘the impact of using alcohol including: failure to fulfil duties at home or work; using alcohol in dangerous situations such as driving; legal problems; fights with spouse over use of alcohol.’ In comparison, those classed as alcohol dependent account for 4 percent. I fear tax increases are on the way.
French based and Paris stock exchange listed Pernod Ricard are the second largest drinks company in the world with brands such as Absolut Vodka, Martell Cognac and Chivas Regal in their extensive portfolio. It also includes Jacobs Creek; recently they brought 600 employees of Pernod Ricard China to Australia for team building and getting to know the Jacobs Creek brand. A brave and bold move that will not only be a boost to JC but all Australian wine sold in China.
Fosters have announced a new name for the wine business; From henceforth it will be known as Treasury Wine Estates (TWE) Nothing wrong with that but the announcement was full-on, "Under a new name, we will become the guardians of a cherished wine heritage and build a global stamp of excellence in international wine. From here on, every employee is encouraged to have one foot in the boardroom, one foot in the vineyard and a focus on the global marketplace."
"It takes a special alchemy for a great wine to come into being: an ardent sun, a soft rain and a rich earth. Above all, it requires the attentions of a devoted grape grower and winemaker. It's a delicate balance of science and instinct that yields a truly memorable glass of wine."
I'm not sure what was being drunk at the time this was written, but this sort of company-loving, all-employee-encompassing drivel more often than not originates out of what is being smoked.