News
Guess the vintage
Vintage can never be accurately summarised until the final grape is picked. Last year, the vintage was around 1.6 million tonnes.
Grape-growers in the Riverina held a meeting on Monday 7 February. Brian Simpson, CEO Riverina Wine Grapes Marketing Board (WGMB), said there was ‘simmering tension.’
At this stage it looks as if the Murray Valley has been the hardest hit of the three inland regions. Mark McKenzie, CEO Murray Valley Winegrowers, said he expected losses of 30 percent plus. This figure has now been revised up to 50 percent or more. In dollar terms, that will cost growers around $40 million in farm gate revenue, even against last vintage’s very low returns.
The Riverland region was the least affected. Chris Byrne, Executive Officer Riverland Winegrape Grower's Association. Byrne is also a grape-grower himself, and in speaking about his own grapes he says, ‘with the rain we’ve had, I think yield loss to disease may be offset by berry weight. (An increase of 1 mm in diameter, of a 10mm berry = + 33% berry weight).’
In optimistic mood he adds, ‘The Riverland 2010 harvest was 333.6K tonnes in total. (Wineries 56K, Growers 278K.) I can’t see why it will be much different this year. If anything, I suspect we may grow more.
As is the way of agriculture, one farmer’s disaster is another’s golden opportunity. As Byrne indicated, ‘retired’ patches of vines have come back into production. The only reason for that is the smell of money.
An Adelaide-based broker said there wasn’t as much bulk wine around from the inland regions as had ‘been advertised through the media.’ The logic used was that wineries needed cash flow and so, as the vintage approaches, it’s normal for them to offer wine to brokers as a means of generating that necessary income. There have been few knocks on the door this year, though, with offers of inland wine.
However, according to the broker, when it comes to premium wine, ‘there are copious amounts sitting in tanks across Australia’. He adds, ‘I can go and buy a million litres of, say, McLaren Vale Shiraz 2008 vintage and that would be from only 2-3 suppliers. I’m currently preparing my New Bulk Wine List to go out to buyers around Australia and I would say 99 percent of my list is premium and not from the inland regions’.
At the moment, the price is low. The broker TKR spoke with says he is selling premium wine at $2.20 litre, while less than two years ago that price would have been between $4.00 - $5.00 litre. The wineries of the Margaret River region tout their premium status; however, according to the broker, ‘there are many top named wineries virtually begging me to try and help them move premium wines from Margaret River and the prices have crashed.’
Cynical comment: No matter the region or whatever the reason – flood, fire, disease, hand of God or sabotage – whatever grapes survive in 2011 will be fantastic, wonderful, full of flavour or simply the best ever.
Tight times
Tidewater Funds Management Limited is the Responsible Entity for Cheviot Kirribilly Vineyard Property Trust. Tidewater, along with Cheviot Kirribilly Vineyard Property Limited, has been in discussions with ‘external parties’ about ‘restructuring the Group to provide greater financial stability in the prevailing environment.’
In short, they have raised enough finance to see them through vintage 2011; however, what will happen after is not clear and further discussions will need to be had. The reality is that they may have to close, or sell, some vineyards.
Biggest players
The world's two largest producers of spirits are Diageo and Pernod Ricard, with Diageo tending to claim first spot and Pernod Ricard taking the title of co-leader. It hardly matters; both are large and both have sizeable wine operations, although Diageo is whittling down theirs and Pernod Ricard has gone in for reorganisation and probably has seriously considered exiting the field.
Both have recently revealed their first half results. On comparative performance for the period Pernod Ricard declared sales of A$5,851 million, while Diageo reported turnover of A$8,507 million.
China was the big growth area for Pernod Ricard, possibly the result of getting the China team fired-up by bringing most of them to Australia last year (that little sojourn wasn’t all about Jacobs Creek).
The 14 strategic Spirits and Champagne brands account for 59 percent of total sales (up from 55 percent the previous corresponding period). Eight of the brands achieved double digit growth, lead by Martell Cognac at 32 percent.
As with Diageo, wine got short shift in the report: ‘The four Priority Premium Wine (Jacobs Creek, Bancroft Estate, Campo Viejo, Graffigna ) brands posted volume and sales growth of 3 percent This represented the first return to volume growth since the first half of 2007/08.’
Can we read any good news in that? Just a little. One assumes the 3 percent increase wasn’t divided across all four brands? Therefore, one wonders which did well and which didn’t? It would be good to think that Jacobs Creek was leading the pack, but if TKR had to put money on it then Graffigna is where it would be placed. Growers take note: there could be more trimming the cloth in order to make for a better fit next year.
Diageo has fulfilled speculation and finally parted with £1.3 billion ($2.09 billion) for Turkish spirit producer Mey Içki. Reports suggest that the reasoning behind the deal is to open Turkey to other Diageo products.
Changing Hands
The sale of the Remy Cointreau Champagne brands (Piper-Heidsieck and Charles Heidsieck) has been completed. The new owners are the EPI Group. A very secretive group belonging to the Descours family who are into luxury goods and stores such as J. M. Watson (which makes shoes so expensive most people would be afraid to walk in them). The Descours are not without wine experience as they own Chateau La Verrerie in Provence.
Expanding
Viña Concha y Toro snapping up Fetzer Vineyards and related assets (from Brown-Forman) is an interesting move. The price is put at US$238 million. The question it raises in Australia is how this benchmarks the value of Treasury Wine Estates’ Beringer brand.
In 2000, Fosters acquired Beringer for A$2.6bn (at the time around US$1.5 billion). Brown Forman had acquired Fetzer in 1992 for around US$90 million.
Fetzer and associated brands’ annual case sales are put at 3.1 million (worth US$156 million.) Treasury Wine Estates’ Beringer and Australian brands total around 18 million cases (worth, in the financial year 2010, A$933 million).
The sums are difficult to do without knowing exactly how much Australian wine is involved; however, previous write downs have clearly shown that Beringer is today worth nowhere what was paid for it. When Treasury is floated, will the worth of Beringer be truly reflected?
Roll the dice:
Vok Beverages have announced that they are increasing the prices of the wine brands they distribute under a joint venture agreement with Foster’s. They stated that Queen Adelaide is going to move from the $5 a bottle sector to over $7 a bottle. Good for them – if they can do it. It will be interesting to observe progress; the Queen sells around 250,000 cases a year and Vok say they have conducted taste comparisons where it performs better than other $5 wines. I haven’t tasted the Queen for some time, but I well remember the Chardonnay being of high standard. The real test is whether consumers will spend the extra money, or opt to buy a cleanskin?
Moving up
Discount supermarket group, Aldi, tend to keep a low profile but they are gaining market share. Jason Bowyer from Cheviot Bridge has taken a position as senior buyer and the company is said to be in expansion mode. The down side to Aldi is that it’s greatly into private label product. Not so good for those trying to develop a brand, but there is room in the market for all. The good point is that Aldi just about keeps Coles and Woolworths on their toes and more competition for them will, in the longer term, be good for the industry.
|
|
|
 |
News Archive
For the love of Chestnuts
2012 En Primeur: Sauternes & Barsac Tasting Notes
Langton's Classification V Set
Len Evans Foundation Auction
Behind Bindi: The Life of a Winemaker
Champagne –all about marketing or worth the hype?
London Launch of Burgundies 2011
The State of New Zealand Pinot Noir
Beauty and Balance the Razor's Edge
Yalumba Tasting – Aussie Rules
Hospices de Beaune Auction 2012
Langton's Classification Auction 2012
Hill of Grace 50th Anniversary Lunch
History of Langton's Classification
Melbourne Private Cellar - An Extraordinary Auction
Dr Ray Beckwith OAM - a Tribute
The Future of the Australian Wine Show System
The Jura's famous yellow wine
Clonakilla - A special Shiraz Viognier Tasting
Key News - September 2012
October Langton's Cellar Club
Single Vendor Flood Damaged Auction
Robert Parker & Jancis Robinson MW
A great Burgundian domaine restored
Seppelt Para Liqueur Vintage Tawny Collection - Special Auction
Vega-Sicilia - A special Single Vendor Auction
Opera Australia Christmas Auction
Out of the Blue Comes a Farm
The competitive Mr. Basset OBE, MW, Best Sommelier in the World
Uncorking Penfolds Clinic
Fruit of the Forest: Wild Fungi
Innovation and Experimentation
The Risk Taking Wine Psychologist
Sydney Single Vendor Auction
Hill of Grace 50th Anniversary Lunch
Australia's Top 100 Auction Wines for 2011
Grenache Day Blogger's Breakfast
A French Sleeping Beauty Awakes
Black Blue & Grey-Wolf Blass Luxury Release
An Enviable Inharitance - Olivier Leflaive
Key News - December Edition
Cross[x]Species Adventures
The China Syndrome: Shanghai International Wine Challenge 2011
Christmas and another great vintage in Alsace
Down in the Woods: Franciacorta and Ca' del Bosco
Foie gras and sweet wine in the Loire
Key News - October Edition
Bordeaux Masterclass & Dinner
Invisible Touch: Benchmark Chardonnay & Pinot Noir
Key News - September Edition
The Unsung Heros of the French Wine Harvest
Penfolds White Winemaking Overview
It's only Natural: Torbreck Natural Wine Project
On Organics, Biodynamics and Sustainable Viticulture
Key News - March 2011 Edition
Langtons is now on Twitter & Facebook
The Nine Network: Burgundy 2009
Key News -February 2011 Edition
2007 Hospices de Beaune Review
Penfolds Rewards of Patience - Decant Guide
The Drinks Interval: Wine & Cricket
Last outpost of the Bristish Empire
Trevor Mast Charity Auction
Shipping for the Festive Season 2010
Keys News - November Edition
From Northern Ireland to New Zealand: Te Mata Coleraine 2006-1991
Charity Lot - 123 Classified Wines
BUY CLASSIFICATION POSTER
Variations on a Theme: Coonawarra Reds 2006-1982
Key News -October Edition
Key News - September Edition
Flaming Ferrari: Yalumba the Signature and Single Site New Releases
Classification V - Coming Soon!
Key News - August Edition
Blood, Sweat & Tears: Peter Lehmann Stonewell Shiraz 1987-2006
Bordeaux 2009 Reflections
A Perfect Ten? Bordeaux 2000 reassessed 10 years on
2005 Grange: Where do the Grapes come from?
Is it a Bird? A Plane? It's 707!
Meet the Winemakers Behind Today's Penfolds Great Reds
Bin Files: Penfolds 389 vs Grange
Treasured Bottles - Yarra Yering
The Evolution of New Zealand Pinot Noir
SINGLE VENDOR AUCTION DEC 2009
Opera Australia Christmas 2009 Auction
Classic Wines of Australia 1961-1970
Parker Review - Tuscany 2006 & 2007
French wine remains the worlds reference point
PINOSOPHY – Brian Croser’s Pinot Noir Manifesto
Penfolds Primary Reds Rise Above Stock Market Blues.
Langton’s Top 500 Australian Wine Prices 2007
The Great Wine Estates of Western Australia “2007 En-Primeur Campaign”
147 Vente Des Vins - Des Hospices de Beaune
LANGTON’S Classic PENFOLDS Wine Auction
Jasper Hill – The life and works of Ron and Elva Laughton
McWilliam’s Mount Pleasant Lovedale Semillon – Hunter Valley
Robert Parker Jr.’s top 180 Wines of the 2006 Vintage + Andrew Caillard's Bordeaux Impressions
Opening Gambit - Andrew Caillard MW en route to Bordeaux
Heritage & Evolution: A Tasting
Certainty! The Claret Drinker's Song
Wine Investment – Swim between the flags
Penfolds Classified Wines
Classic Penfolds Wine Auction
The Siren’s Song – Bass Phillip
Exchange Current Listings
Andrew Caillard MW reviews Bordeaux 2005
Bordeaux 2005 – Does it get any better than this? What the international reviewers are saying
Nicky Riemer – the new Head Chef at Langton’s Restaurant
Langton's Exchange in 2006
Langton’s 2005 Classification IV – International Reception, Predictions and Tastings
Langton’s 2005 Classification IV – International Reception, Predictions and Tastings
LANGTON’S EXCHANGE – BUY NOW and SAVE 15%
Great Wines Estates of WA Live Auction (V) – Open for Bidding Online October 21 to November 12
Langton’s 2005 Classification IV
2005 Classification in Gourmet Traveller WINE
Bordeaux 2004 – A Classic Vintage
Penfolds Grange Auction – Now Open
MCWILLIAMS Celebrity Blend-Off for Charity Wine Auction
Grange Auction Open for Bidding
LANGTON’S EXCHANGE – BUY NOW!
1998: Vintage of the Century
A Vertical Tasting of De Bortoli Noble One
The Story of Grange by Max Schubert (1915–1994)
Penfolds Grange Auction June 13 - July 14, 2003
A Lazy Eye on Pink Cliffs & One Eye
Henschke Hill of Grace and Mount Edelstone
Selling at Langton’s in 2003
Australian Wine Exchange offers Giaconda Chardonnay
Large Format Grange Sets Records
The Sensational 2002 Central Otago Pinot Noir Vintage
Central Otago Pinot Noir Celebration and Barrel Auction
The John (Jack) W Henderson Collection - Auction Closes February 3, 6pm
Shiraz Australia II Auction
Seppelt Para 100 Year Old Liqueur Vintage Tawny Barossa Valley - Vintages 1878-1903
|