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Long read: Raising a glass to Australian wines

Published:  30 September, 2021

The UK’s love for Australian wines shows no signs of abating. With good availability, competitive pricing, and good transport and distribution networks, supply from Australia is still extremely attractive for UK buyers and wine drinkers. Here, Paul Braydon, buying controller for Kingsland Drinks, delves into the wine trends emerging from Australia, shares insights on the category post-FTA (Free Trade Agreement), and what the UK drinks sector can expect to see next.

Australian wine suppliers are well established, well respected and have a strong focus on the UK market and its preferences, price points and brand appeal. They have the necessary quality and logistics experience to service this market and critically have a wide range of wine styles from entry level to super premium that are much loved by UK consumers. There’s something for everyone, from delicate fresh whites from Western Australia and exceptional value varietal reds and whites from the Riverland, through to amazing traditional method sparkling from Tasmania, ripe, rich and full-bodied Chardonnays, and Pinot Noirs that can compete with the best in the world.

Sustainability, provenance and accountability also continue to be high on UK consumers’ priority list, especially as we emerge from the global pandemic. Australian producers have some excellent ranges in the market, and innovations and projects in the pipeline which meet these needs head on.

They really can do it all and are producing wines that tick all the right boxes.

Free flow

The UK wine industry celebrated the FTA with Australia – expecting it to reduce costs for importers and bring greater choice to UK consumers. It is a levelling of the playing field for Australia alongside Europe and Chile, and any removal of red tape and cost reduction that can be passed to the consumer will help.

However, while we are strong supporters of the FTA, the excitement around it must be put into context in that it’s the removal of the UKGT (UK Global Tariff), not duty or VAT, so the overall impact on the cost of a bottle of wine on shelf will be minimal – less than 10p if directly passed on. Against increasing costs of dry goods, global freight, energy and transport, it’s unlikely this will ever be realised as a cost decrease to the consumer.

The focus on the UK market for Australia will continue, but it’s important to remember that the UK was by far a bigger export market by volume than China, accounting for almost a quarter of the total 2020 wine grape crush, according to stats from Wine Australia, vs 11.5% for China, albeit with China until recently representing greater in value.

Key for Australian suppliers will be the ability to sell more premium wines to the UK market, especially red wines to offset the lost exports to China. The deal should bring benefits to both the Australian wine sector and to British wine shoppers, as ultimately, higher quality wines will be coming into the UK at a more competitive price point allowing space for greater innovation and a raising of standards – further strengthening the UK’s love affair with Australian wines.

Looking ahead

Pricing is becoming more competitive with the softening demand and price pressure created by China. We predict that Australian wines will dominate the core price points and become increasingly competitive for premium, ‘cool climate’ wines from regions such as Limestone Coast, Langhorne Creek, Barossa and McLaren Vale.

The harvest for the 2021 vintage has been excellent in terms of quality, with little pressure from disease or water shortages and a long, slow ripening. The quality of the 2021 vintage reds has been outstanding and some of the entry level reds have been particularly impressive when you consider the cost.

Australian wines remain one of the most exciting and best-selling countries for us, with wines at both ends of the price ladder holding their appeal. At one end of the spectrum, shoppers look to the exceptional quality that Australia offers at value price points, with retailer own-label sales performing very well. At the other, we’ve had some excellent success with premium wines as consumers looked to increase their spend on treat occasions to replicate at home what they would have spent in the on-trade during lockdown.

Our partner producer, Andrew Peace Wines, sees real potential in the UK right now, especially with the new FTA and a continued interest in Australian wines from British drinkers.

We worked with Andrew Peace Wines over the summer on a consumer campaign powered by the strapline ‘Good times are now’ featuring high calibre chefs and influencers in the foodie space. The campaign brought a new energy to the Australian wine fixture, driving the brand’s affinity with summer and barbecue and gave shoppers the confidence to know that what they put in their basket will deliver on taste, quality, value and overall drinking experience.

Andrew Peace Wines is a good example of the above, having really gone from strength to strength during the pandemic. As Andrew Peace says, “Consumers are doing a lot more research into their wine purchases and the trade is doing their homework to ensure the wines that go on shelf suit today’s drinking occasions, taste preferences and budgets. We know our wines have a loyal fan base in the UK, and that is only set to expand following the summer promotional activity. It worked to raise awareness of our brand in what is a very busy and competitive fixture, and to drive sales of our wines both at the entry level price point and the more premium end of the scale.

“We can offer everyday favourites – easy drinking Chardonnays and Shiraz – as well as new varieties and styles including sulphur-free and vegan wines.

“We are confident British wine drinkers will continue to welcome and enjoy Australian wines and that the new FTA deal will be a mutually beneficial move, making more space for more premium products that we know our country can produce and that we know Brits are ready for,” concludes Peace.

For further information, click through for Kingsland Drinks or Andrew Peace Wines.