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ProWein 2015: Australia set for most "exciting period" in its history predicts Neil McGuigan

Published:  16 March, 2015

Critics of Australian wine need to "stand back" and prepare themselves for what Neil McGuigan of Australian Vintage believes could be the most "exciting period" in the country's history driven by the best quality wines it has ever produced.

The outspoken chief executive of Australian Vintage told at ProWein this weekend that all the talk in the trade of the problems facing the Australian wine industry are so wide of the mark.

"Australia is still growing in the market and growing its market share," he stressed.

Australian Vintage's Neil McGuiganAustralian Vintage's Neil McGuiganAustralian Vintage's chief executive Neil McGuigan

He argued the only real problem it has had in recent years has been its uncompetitive exchange rate for key international markets like the UK, but when it comes to wine quality and winemaking it is there with the very best in the world.

He pointed to the fact that all the key varietals that were planted in Australia during the 1990s are only now just starting to produce the best quality wines they are capable of.

"So stand back guys, the best wines are yet to come from Australia," said McGuigan.

"Australia is about to kick off again and have another exciting period in its history. Even the Australian dollar is coming back in our favour," he added.

"The ball has been passed to us, we just need to make sure we kick it and grasp the opportunity to take the Australian wine industry to another level."

He pointed to the enormous untapped opportunities for Australian wine in the United States as one reason to be very excited about its future. The pace of growth there might on paper seem slow, with the average per capita consumption of wine up to 9.4 litres from 8.9 litres in the last five years. But the sheer scale of the country means that is an extra 200,000 tonnes of grapes that they need to find.

"Americans are on a wine journey and we need to go on that journey with them," he added.

China is also opening up more for Australia, despite its distribution issues. It has recently signed an agreement with major Chinese food and drink distributor, Cofco, and is confident that will help spearhead McGuigan's growth in the country.

"There is going to be a tsunami of wine going in to China in the coming years," said McGuigan.

He also has its eyes on growth in Africa and across mainland Europe with plans to open a dedicated office in Europe within the next six months.

"Our dance card is not full yet," stressed McGuigan.

UK: high on the agenda

But the UK remains very much high on its agenda with McGuigan now growing to be the fifth biggest overall wine brand in the UK, and the second biggest Australian brand. This, Julian Dyer, Australian Vintage's UK head, said compared to being the eighth world brand in the UK two years ago. "Two years before that we were not even in the top 10," he added.

Its primary focus in the UK is to build its "distribution footprint" across the major off-trade channels both in the major multiples and specialists, but also increasingly in the independent sector.

It was working hard, said Dyer, to build its profile within the cash and carry and wholesaler market so that it could service the larger independent groups.

The independent merchant sector is also a key channel and one that McGuigan concedes it should have been years ago. "We had the ability to it, we had the wines, we just did not have the commitment to it," he admitted.

"We are building a brand for the long term and we need to build our brand equity with both the consumer and the trade."

To help makes waves within the independent sector McGuigan is working hard to introduce more exclusive wines in to the market, like its super premium The Philosophy wine, which is McGuigan's tribute to Bordeaux. A blend of Shiraz and Cabernet Sauvignon it retails for well over £100 and is an example, said McGuigan, of the style of wine it is capable of making that is a complete counter point to the large, jammy, high alcohol wines Australia is often criticised for making.

"It makes a statement about what we can do in Australia with super premium wine," said McGuigan. "We used to be able to make these stylish, elegant wines at only 14%."

Ultimately, he said, Australia will be the judged on the quality of its wines, and it is a message he drums home with his staff, and particularly his winemakers, every day. All the wines it produces must be all about quality first, with fresh, fruitful nose, the rich bright colour, and no harshness or bitterness on the palate. Wines based on the "purity of the fruit".

A philosophy McGuigan, he stresses, takes in to his wines whether they cost £4.99 or £75.

New launches

Dyer said the UK market can expect to see a number of major brand launches this year.

It is looking to introduce at the London Wine Fair in May a new fruit sparkling wine range at 8.5% abv aimed at supermarkets.

It is also looking to capture some of the Prosecco share of the market with a new McGuigan Frizzante sparkling wine made in the Prosecco style which will be promoted down to around £6 to £7 in the major multiples.

Whilst both Dyer and McGuigan conceded the lighter alcohol and no alcohol categories had not grown as quickly as expected they were still strategically important areas of the market to be in and that they have a long term future.

Importantly the investment it has made in spinning cone technology in order to make such wines, is now helping them to produce slightly higher alcohol wines, which have greater wine credentials in the 8% to 12% area. "It has given us a USP in technical expertise in that area," said Dyer.

Dyer said it was committed to continuing to bottle all McGuigan wines below £10 in the UK and did not see that changing for a long time.

"UK bottling is so environmental and cost efficient we are not going to make any changes there," confirmed Dyer.

It was also bottling in the UK for customers across Europe and in to Russia.