Some months back I wrote of the massive shortfall in the 1995 vintage (around 250,000 tonnes of grapes) and how it would translate to higher wine prices. After much looking over shoulders at competitors, major companies are now posting wholesale price increases on most products from July 1.
The price increases are in part to recoup dramatically higher vintage costs — mainly by way of vastly increased grape prices but also because fixed costs are much the same for a small vintage as for a large one, hence a higher production cost per case in small years like 1995 — and in part to retard consumption until supplies catch up with demand.
Producer price increases are always multiplied by Federal and State ad valorem taxes and retailer margins. However, (and the timing could not be worse for the industry or wine drinkers), the Federal tax grab also increases by 8.3 per cent on July 1.
Thus, if a producer raises the wholesale price on a wine from $50 to $55 a dozen, the nett effect on price to the consumer will be more like a dollar a bottle than the fifty cents implied by the ten per cent price hike: add 24 per cent Federal Sales tax, 13 per cent Territory licence fee, and a 33 per cent retail mark up to $50 and you have a retail price of $7.76.
Move the wholesale price to $55 and increase the Federal take from 24 per cent to 26 per cent, and the shelf price becomes $8.67 — an increase of 91 cents, or 12 per cent.
In this environment, it does pay to stock up a little, not just to save money but to preserve our drinking standards. For one noticeable effect of creeping wine prices in the last couple of years has been a reduction of wine quality at given price points.
Increased demand and higher production costs mean, quite simply, that the $4.99, $5.99 or whatever wine you buy today is not as good as one bought at the same price point two years ago. Simple arithmetic, really, but not a reality in our previously oversupplied wine market.
In the last two weeks I have tasted about two hundred under-$10-a-bottle Australian wines (ie, before the coming price rises). In general, red-wines offer better value than the whites. And if faulty wines are few and far between, ‘bland’ seems the commonest tasting note, especially amongst white wines. However, there are some wines that deliver really good value for money.
This is my pick of recently-tasted under-$10 reds, in no particular order: Penfolds Koonunga Hill Shiraz Cabernet (both the 1992 and 1993 vintages can still be found with retailers); Wynns Coonawarra Estate Hermitage 1993; Lindemans Nyrang Hermitage 1993; Seaview McLaren Vale Shiraz 1992; Seaview McLaren Vale Cabernet Sauvignon 1992; St Hallett Gamekeepers Reserve 1994; Mildara Coonawarra Hermitage 1993 (but not the 1992); Orlando Russett Ridge Coonawarra Cabernet Shiraz Merlot 1993; Jacobs Creek Cabernet Shiraz Malbec 1993; Richmond Grove Coonawarra Cabernet 1993.
And the whites: Krondorf Chardonnay 1994; Rothbury Estate Trident 1994; Wynns Coonawarra Estate Rhine Riesling 1994; Leo Buring DW T18 Eden Valley Rhine Riesling 1994; Penfolds Semillon Chardonnay 1994 ( simply phenomenal at the price); Wolf Blass Chardonnay 1994; Wyangan Estate Chardonnay 1993; Richmond Grove Watervale Rhine Riesling 1994; Jacobs Creek Chardonnay 1994; Deen De Bortoli Vat 2 Sauvignon Blanc 1994; Taylors Clare Valley Chardonnay 1994.
With the disclaimer that vintages and prices move quickly, all of these wines are reasonably well distributed and subject to retailer discounting from time to time. The shrewd shopper should buy and drink well from this list.
And a closing note on the 1995 vintage vintage. It was not only a small vintage but one of mixed quality as well. Ian McKenzie, Group White Wine Maker for Southcorp says it tended to be the warmer areas that were down in volume (Hunter, McLaren Vale, Riverina, Murray River, and Barsossa Valley) while the cooler areas suffered less.
Ian says the group has picked, from its Tumbarumba Vineyard, NSW, the best chardonnay he has ever seen outside of Burgundy, France. Now, that’s really saying something because Ian has probably processed a wider variety of chardonnay than any other wine maker in Australia.
Central Victoria, he says, produced outstanding shiraz where Padthaway performed with chardonnay. Unfortunately, Coonawarra, just an hour south of Padthaway, hit hard times after a run of good vintages. Wet, cool weather closed in and many red grapes simply refused to ripen — which probably means lots of Coonawarra shiraz in our 1995 bubblies and more reason to stock up now on decent reds.