Brian Croser blames big business for wine industry problems

Author: Tony Love
Source: The Advertiser
Review Date: Jun 2010

ONE of the country’s leading winemakers has pointed the finger at Australia’s big wine corporations, accusing them of being responsible for the industry’s major problems.

An oversupply of grapes and the decline of our international wine reputation had left the industry grappling with serious challenges, South Australian premium winemaker Brian Croser told a meeting of agricultural and resource economists at Adelaide Convention Centre yesterday.

The causes of the dilemmas, according to Mr Croser, the founder and former owner of Adelaide Hills based Petaluma wine company, can be tracked directly to fewer than 10 large wine corporations which crush more than 10,000 tonnes of grapes each year, amounting collectively to more than a million tonnes.

One of the main problems is that the country’s 2100 small winemakers are producing what the market sees as “fine wine” while the largest companies are producing “branded commodity wine” which has been the dominant force but now the root cause of the downfall of our international presence.

Our large-production commodity wines have fallen from favour in international marketplaces as they compete on price and increasing quality against cheaper products from Chile, Argentina and South Africa.

“The biggest problem for the fine wine community is the negative and deteriorating image problem created by the behaviour of the branded commodity wine industry,” Mr Croser said in his speech to the resource sector economists.

The oversupply of grapes and a “wine lake” estimated to total more than a million unsold bottles has also been created by massive plantings mostly from the major companies or through contracted vineyard growth that is now not viable, Mr Croser said.

The executive director of Wine Grape Growers Australia, Mark McKenzie, agreed that large companies had “clearly” led the overplanting of grapes.

And short-term corporate attitudes driven by shareholder pressure has simply been unrealistic, especially with the prices paid to growers, he said.

Supply and demand, and international market and currency issues have been major problems at the popular wine end of our industry, Mr McKenzie said.

He also agreed with Mr Croser that the inability of big business to understand the fine wine sector, corporate culture, a lack of patience and management stability as among the reasons large companies have faltered.

“The failure to appreciate the inherent differences between the branded commodity and fine wine businesses has created a debacle for Australia’s fine wine image and trade opportunities overseas,” Mr Croser said.

“Australian fine wine is rapidly becoming an oxymoron in the global wine trade – that’s where we are today,” he said.

The challenge for the Australian wine industry was to turn that around and convince the global wine market our fine wines were up there with the world’s best, made from fine vineyards in cool-climate regions.

Small winemakers were the key to unlocking our fine wine potential in the next two decades because they were our true personalities, innovators and the magnet for international wine market gatekeepers, he said.

“They are essential to the restoration of Australia’s credibility as a fine wine producer.”

Mr Croser emphasised several times in his address to Australia’s leading wine-business experts that neither the cool-climate regions nor their community of more than 2000 small vignerons were responsible for Australia’s global wine demise nor the grape and wine surplus.

Artisan winemakers have had to survive in the shadow of the large companies, Mr McKenzie said.

“The fizz and the sparkle of the industry – small, regional winemakers – haven’t had the opportunity to shine while the juggernaut of the popular brands has happened,” he said.

Today, the University of Adelaide launches a new Wine Economics Research Centre.

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