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Victoria on the offensive

Published:  23 July, 2008

By Tony Keys
We have a dream' appears to be the mantra coming out of the wine industry of the southern Australian state of Victoria. The dream, for once, is not all theoretical hyperbole; goals and aspirations, including real figures, have been included. The strategic plan for the Victorian wine industry 2006-2010 aims to:

grow total sales by 39% from $1.31 billion to $1.82 billion

grow annual exports by 10% per year from $525 million to $845 million

expand cellar-door sales by 6% per year from $228 million to $305 million - achieving five million winery visits a year

grow domestic retail sales by 5% per year from $558 million to $712 million.

Fine fighting words, but the plan is a little vague on how this is going to be achieved. Exporting is a must, but many of Victoria's 583 wineries fall into the very small' category. High production costs and the care that goes into making these wines means that they're unlikely to be found on a UK supermarket shelf.

Michael Matthews is chair of the Victorian Wine Industry Association: The UK may be big and in every one's face, but a small winery making premium varieties may be better off targeting a market that has demand for those styles and price pointed wines. Big is not always best.

We will also work with wineries to ensure they are export ready, if export fits the enterprise strategy,' he says.

Matthews' emphasis is on building the Wines of Victoria' brand: The new brand is not another series of vineyard scenes, winemakers sniffing or grapes; it is modern and very contemporary, designed to work in today's wine market, not yesterday's,' he says.

At this stage it's a lot of flag waving but it does have the backing of the Victorian State Government, which has committed $260,000 to the venture, some of which will go towards export facilitation programmes and events both in export markets and with inbound export buyers and media, plus workshops for wineries to build their skills in business, marketing and export.

Chris Pfeiffer was chair of the steering committee that put the report together: Export growth at this moment appears to be driven by the lower price segment, led by Yellow Tail and other "critter" lines.

This, combined with an aggressive discount policy by some of our major producers, has led to the expectation of lower prices. There is not a strong recognition that Australia produces higher-priced wines that are similarly good value,' he says.

Martin Spedding, president of the Mornington Peninsula Vignerons Association and steering committee member said: The challenge is now to trade up to the higher price points which must be driven by growing an understanding of the Australian wine industry's regionality and the depth of quality that exists at the "boutique" end of the market, as opposed to the commodity end.'

Spedding believes South Eastern Australia doesn't tell a UK consumer anything that is useful about the wine in the bottle it's about as useful as Southern France'. Hopefully one day in the not too distant future Mornington Peninsula will equate with great Pinot Noir, Yarra Valley with great Chardonnay, Heathcote with great Shiraz,' he says.

Some reliance on Wine Australia (previously known as the Australian Wine Export Council) to help in this area appears to be both Spedding and Pfeiffer's expectation.

It's churlish to fault the theory that's behind all the points in the 2010 document, but boil it down and the problem remains - regardless of the quality of the wine, can more people in Australia, the UK or the US be convinced to pay more for their daily wine?