Austrian glass manufacturer Georg Riedel recently toured Australia touting his wares. Georg would have us believe a glass is not simply a convenient vessel for moving wine from bottle to lip.

He claims glasses from his Kufstein factory are purpose built to transport the subleties and highlights of specific wines and spirits to the drinkers nose and palate.

In an article in Wine & Spirit International, we’re told that Georg’s father, Professor Claus Josef Riedel, in 1970 turned his back on aesthetics to concentrate on functional wine glasses. His family had been engaged in the glassware trade for two centuries, first in Bohemia and now in Austria.

Professor Riedel believed that a wine’s first contact with one of the tongue’s four taste zones (sweet, bitter, salt, and acid) was generally the most influential factor in the drinker’s perception of its taste.

And given that the nose detects a far bigger and more subtle array of charactersitics than the tongue, glasses had to capture as much aroma as possible.

Regarding this latter attribute, Professor Riedel was not the first to observe how dramatically better big glasses are than small ones. Perhaps he’s taken this further than anyone else, though, with a special Bordeaux glass capable of holding about one litre of wine.

It sounds more like a goldfish bowl than a wine glass and you can imagine what a twit you’d look using one in public (perhaps even heroic at Canberra’s wine and food frolic).

I remember ecountering outsize glasses at restaurant Gener Nev in Asti, Italy. There we revelled in the perfume of a 1978 Barolo served in tiny splashes in huge bowls. But it was a great wine and may well have been just as impressive in standard tasting glasses.

If Riedel is not unique in the immensity of his glasses, he is, I believe in claiming to shape each model to tip wine precisely on the right part of the tongue to maximise the best features of a specific wine.

For example both his riesling and pinot noir glass have an outwardly curved lip (Prof’s son Georg calls it a spoiler) directing wine to the tip of the tongue “highlighting fruit and sweetness and balancing the natural acidity of these grape varieties.”

But for cabernet sauvignon and chardonnay, the design pushes wine to the middle of the tongue balancing fruit and acidity.

Do the glasses really work? Wine & Spirit quotes American wine guru Robert M. Parker, “All of this may sound absurdly high-brow or esoteric, but the effect of these glasses on fine wine is profound. I cannot emphasise enough what a difference they make.”

And the magazine also cites a tasting in New York attended by some of the world’s best palates, including our own Len Evans, concluding that the lowest-rated wine in the highest-rated glass outperformed the highest rated wine in the lowest-rated glass.

That, of course, is absurd. Does Mr Riedel really expect us to believe his glasses are more important than the wine we drink? Believing glass size and shape is crucial to delivering aroma is not unreasonable. But to assert that it can be infinitely fine-tuned to best suit every wine on earth — indeed to trasform humble wine to great — stretches credibility.

Whether or not the glasses really work as claimed, Professor Riedel’s venture has been a remarkable success commercially. The factory now employs 300 people and turns over fifteen million pound sterling a year.

With all those mouths to feed, little wonder he travels the world with his velvet-lined sample case mesmerising a breathless wine press.

The success is a measure of just how wide and deep the wine culture has spread in the last twenty years. And perhaps illustrates the pretension that sometimes accompanies it.

Georg has developed, as well, Cognac glasses in conjunction with Hennessy and there are whisky glasses (with Campbell distillers) and grappa glasses (with Nonino) in the pipeline. In all these he seeks to highlight the subtle fruits hidden under masses of spirit.

For all the publicity Mr Riedel attracted, I don’t think one sensible, sceptical phrase has been written in the Australian press. Let’s give one sceptic, wine merchant David Farmer,the final say, “I have recently been experimenting with a goldfish bowl as the ultimate taster. I wonder when these tastings are set up if anyone wonders whether viewing the glasses and knowing what is being promoted as the best glass effects the result. I recall Uri Geller being able to bend spoons with thought waves.”

SOUTHCORP OWNERSHIP, SIZE AND SALES

Southcorp Wines is a wholly owned subsidiary of Southcorp Holdings, a public company with a market capitalisation of around 2 billion Australian dollars.

Until 1994 Southcorp Holdings was known as South Australian Brewing Holdings. The name change followed the disposal of its brewing interests to Lion Nathon.

According to figures published in The Australian and New Zealand Wine industry Directory 1994, Southcorp crushed for its own use 162,000 tonnes of grapes in 1993. Its biggest rivals, BRL-Hardy Limited and Orlando-Wyndham crushed 115,000 and 110,000 tonnes respectively.

Roughly speaking then, Southcorp produces the equivalent of 3.3 million dozen 750 mL bottles (or 29.7 million litres) more than its nearest rival.

In March, 1993 Chief Executive, Bruce Kemp, estimated Southcorp had 30 per cent of the domestic bottled wine market (including sparkling wine) and 22-23 of the cask wine market.

Of exports he puts his company’s share at 25-26 per cent, after discounting for the unusually large volumes of bulk wine shipped to New Zealand wine makers following a disastrous vintage shortfall there in 1993.

The Australian and New Zealand Wine Industry Directory 1994 claims our biggest export earners in 1992-3 were Orlando-Wyndham ($78 million), Southcorp Wines ($68 million), BRL Hardy Ltd ($40 million) and Mildara Blass Ltd ($21 million). With current rates of growth, both Southcorp and Orlando-Wyndham seem poised to sail past $100 million a year in export sales this year.

Bruce Kemp puts Southcorp’s current sales break up as 28 per cent export and 72 per cent domestic. He predicts a fifty-fifty split by the turn of the century.

For the six months to December 1993, the wine division’s domestic sales were up 8.7 per cent and exports 34 per cent. Profit before interest and tax was $34.7 million, up 50 per cent.

The group owns, Tollana, Tulloch, Hungerford Hill, Lindemans, Rouge Homme, Matthew Lang, Leo Buring, Penfolds, Seppelts, Woodleys, Wynns, Seaview, Killawarra, Kaiser Stuhl, Stock Gala Spumante, and J.B. Reynolds Cooler.

As well, it manufacures and distributes under licence market-leading cooler, West Coast and Stock Brandy.

HOW SOUTHCORP WINES EVOLVED

Southcorp Wines is the new masthead for Australia’s biggest wine producer. From shortly after its formation in 1990 until 1994 it was known as the Penfold Wine Group.

The group, with its dazzling array of brands and (even by global standards) spectacular collection of vineyards, was formed when South Australian Brewing Holdings (SABH) bought Penfolds Wines from the troubled Adsteam Group.

SABH already owned Seppelts Wines (inlcuding Woodleys and Hungerford Hill) and had moved one of its young brewery executives, Warrick Duthy, to the helm.

However, Seppelts was dwarfed by Penfolds which, over the previous decade, had added numerous wineries, vineyards, and brands to its portfolio. Kaiser Stuhl, Stock, Wynns, Seaview, Killawarra, Tulloch and Tollana were acquired in the early and mid eighties. With them came vineyards in the Hunter and Eden Valleys, McLaren Vale and, probably most importantly of all, included Wynns priceless holdings on the central terra rossa strip of Coonawarra.

The biggest and grandest haul, though was its purchase from Phillip Morris, early in 1990, of Lindemans Wines including the Leo Buring, Rouge Homme, and Matthew Lang brands.

The acquisition included the historic Ben Ean Winery in the Hunter Valley, Chateau Leonay in the Barossa, and the massive winery, bulk-storage, vintage-cellar and packaging facility at Karadoc on the Murray River near Mildura.

With the new brands and wineries came some of the best vineyards in the lower Hunter in the vicinity of Pokolbin and Broke, a huge acreage at Padthaway and, an hour’s drive further south, yet more of the great Coonawarra terra rossa vineyards. These included the plum sites-become-brands, St George and Limestone Ridge.

At the time of the SABH acquisition, Penfolds still had not fully digested Lindemans. How, the trade wondered at the time, would Ross Wilson, head of SABH, blend the Penfold-Lindeman juggernaut with the smaller Seppelts and come out with a profitable business?

Somehow he had to make three distinct wine-making and corporate cultures fit with those of the parent company. To compound the difficulty, the domestic wine market was in the doldrums and the export market, while gathering momentum, was not the booming phenomenon we see in 1994.

Early in the piece, the dominant culture — Penfolds — appeared to gain ascendancy. But some key players from all cultures fell victim as the new corporate cuvee took shape.

From the SABH/Seppelt side, Warrick Duthy moved on, leaving former Penfolds Chief Executive, Ian Mackley in charge with his old sales and marketing force largely intact. Duthy was joined by old SABH insider, Pryme Footner. At around the same time, Penfolds’ Jim Williams, heir apparent to Mackley, also moved on.

By then Lindemas had already lost Philip Laffer, one-time understudy to former Managing Director, Ray Kidd. Laffer was a technical wizz with a hand in the evolution both of many Lindeman classic wines and the brilliant technology behind the Karadoc facility.

Considering the scale of the merger, there was remarkably little blood letting. As well, the core of each company’s wine-making culture remained intact, giving future marketers the necessary gold dust — diversity and individuality — to develop brands.

And while Ian Mackley’s standing was good on all sides, his retirement fell due shortly after the SABH take over.

With Mackley’s retirement, Wilson appointed Bruce Kemp, from SABH’s hot-water division to head the wine group. So Australia’s largest wine company, with a largely Penfold sales and marketing culture and a mix of wine-making philosophies, found itself with a sharp, business-proven pair of fresh eyes at the top.

VINEYARDS

More than those of any other of the four big Australian producers, Southcorp’s wines draw their strength and character from the company’s own vast and impeccable vineyard holdings in New South Wales, Victoria, and South Australia.

Southcorp’s unique ‘end-use evaluation scheme’ links wine maker and viticulturist by tracing, as the name suggests, the end use of each batch of grapes to enter one of the group’s wineries.

As data builds over time, a clear picture of the nature of wine produced from each vineyard plot emerges. Ultimately this lifts wine quality as vineyard management focuses more precisely on what each plot is best capable of producing.

The end-use scheme began with Penfolds and is now applied across the entire group holdings as well to fruit bought from outside growers.

Results of a tasting conducted by international wine society, Les Amis du Vin, dispel any lingering belief in the sanctity of wine-show results or the infallibility of wine-guru palates.

Here, at last, is palpable evidence of the subjective, unreliable, and often meaningless nature of wine judging. As well, the automatic supremacy of cabernet amongst red grape varieties comes under challenge.

The masked tasting, conducted by the Chicago chapter of Les Amis in February, lined up many of the finest French and American cabernet sauvignons from the 1982 vintage.

Fifty judges now wonder how a ring-in won the day. As Chapter Director Paul H. Ernst reported, a shiraz was “the hands-down, concensus favorite of the entire tasting.”

How could grubby-old, work-horse shiraz lick the glitziest names in the glitziest of all red grape varieties, cabernet sauvignon? What was it doing there in the first place?

Ernst writes, “… this year’s ringer was the 1982 Penfold’s Grange Hermitage… no one overtly identified the wine, the combination of cassis-like fruit and green olive character contributed by the oak, sufficed to stump the majority of attendees. Its relative maturity and round, elegant fruit were certainly some of the elements that resulted in it being… the favorite.”

Why the ringer was included, I don’t know. But anyone who attends masked tastings appreciates just how difficult it is to spot the unexpected. When we’re told there are twenty four cabernets to assess, we assume that’s what’s in front of us. Trickery’s the last thing we expect. So, it’s not surprising that no one identified one big, rich shiraz amongst twenty three big, rich cabernets.

Still, assessing the 1982 reds, not spotting the odd one out, was the theme of the tasting. And because the press release focuses on scores, presumably the organisers believe the results have some significance beyond being simply a tally of preferences on the day. Are they telling us this is a valid and definitive ranking of the wines tasted?

For that to hold true, then the results should be reproducible. And, of course, they are not. Even at this tasting where guests were free to use either of two scoring systems, two appreciably different rankings resulted. Were the same wines to be lined up again the next day with a different group of judges, no doubt a different order of preferences would result.

What we have to conclude is that the tasting, like all of its ilk, offers the consumer no reliable guide to quality. It can be seen as nothing more than an averaging of the opinions of fifty people and offers not one useful insight into the nature of the wines tasted.

No absolute value can be stuck on a wine. And even relative values in a line up become less valid in direct proportion to the diversity of styles being tasted. Wine collectors with the 1982s in their cellars might find carefully prepared descriptions of each wine more enlightening than a mere ranking.

The tasting presented a diverse array of wines, including many classics. All five Medoc First Growths were present, plus a sprinkling of other highly-regarded Bordeaux, as was Grange Hermitage, and Opus One, the brilliant joint creation of California’s Robert Mondavi and France’s late Baron Phillipe de Rothschild of Chateau Mouton-Rothschild (one of the Bordeaux First Growths).

Had it been a race, the bookies would’ve cleaned up. The illustrious favourites, under both scoring systems, finished well down a field led by an outsider. (Somehow, though, I suspect the form books won’t be re-written just yet).

The tasting was split into three flights of eight wines each. But even if we question the overall valdity of rankings, it does say a lot for Grange 1982 that it was in the flight containing four of the five Bordeaux First Growths.

Being a touch jealous and not too happy with the way it has been reported, I’m joining forces with Alby Sedaitis of Barocca Cafe to reconvene the tasting here in Canberra and will report back in due course. However, we intend lopping the number of wines from 24 to 12 and the number of tasters from 50 back to 6 — a proper ratio.

We’ll assess the wines blind and then savour them slowly over an extended lunch to see how well our initial assessments hold up.

To paraphrase the recently deceased Max Schubert, creator of Grange, when you’re confronted by magnificence you should savour it to the hilt.

Penfolds this week released its 1991 Bin 407, 389, 28, and 128 reds, and 1992 Koonunga Hill Shiraz Cabernet. There’ll be little of the usual trade fanfare, though — despite incredibly high quality — because retailers were issued tiny allocations, even of the normally abundant Koonunga Hill.

It’s hard to believe now, but just three years ago Penfolds’ sales force worked overtime to sell reds generally regarded as amongst the best in the country. From the late seventies and throughout the eighties prices (with the exception perhaps of Grange and Bin 707) trailed behind inflation rate, with occasional bursts of discounting to reduce stock.

Reasonably enough, Penfolds does not publish its production figures. But my guess is that sluggish sales in the late eighties resulted in reducing output of the top reds in the early nineties.

If that is so, the current shortage is easy to understand given strong export and domestic demand : domestically, sales of bottled red rose 8.5 per cent by volume for the year to January, 1994. I don’t know export figures by segment, but growth exceeds the domestic rate by a big margin (in fact bottled-red exports recently overtook local consumption).

Faced with a great surge in demand, Penfolds responded with a commitment to keep quality up and increase output only as suitable grapes become available. The shortage has thus been met by rationing and a steady increase in prices.

Three years ago, Koonunga Hill was on special in every capital city in Australia at $4.99. Last year’s discount price was $5.99. But retailers used to turning on the Koonunga Hill tap at will, now find the landed price after taxes well over $6 a bottle. In normal circumstances that would indicate a standard price of around $9.50 a bottle with bursts on special at $6.99 or $7.99.

But theses are not normal circumstances. Such is the shortage of good red, hot specials, if they eventuate, will be short lived.

Koonunga Hill was always touted as the benchmark budget red — was, in fact, viewed widely as greatly undervalued. As it nudges past $9 and sails towards $10, we’re forced to re-appraise it. In my view, though, it’s always outclassed many fashionable wines selling over $10, even in the cheap old days.

The 1992 vintage displays all the hallmarks that established the brand: robust, ripe fruit flavours, a surprisingly solid structure and firm, dry finish. It can even be cellared for a few years. It’s easily worth $10 a bottle, and a bargain at anything less in the current climate.

Bin 128, the straight Coonawarra shiraz, takes us to a higher level. It, too, possesses the unique, solid Penfold structure but the aroma and flavour is all Coonawarra berries mingled with sweet/pungent French oak. It has a character all its own, is even scarcer than Koonunga Hill, and should sell for $11 to $14.

Kalimna Bin 28, another shiraz, shares the sturdy Penfold style with Bin 128. But its warmer origins and maturation in American rather than French oak dictate totally different flavours. It’s richer, fuller, and slightly more alcoholic. What sheer joy to savour its potent combination of ripe shiraz and oak handed down from Grange and Bin 389. Best to cellar this glorious drop for five or six years. Expect to pay $12 to $15.

Bin 389, a shiraz cabernet blend from Coonawarra, Barossa, McLaren Vale and Padthaway takes us to yet another quality level. Again we feel the Penfold grip in the mouth, but it comes with a remarkable buoyancy as the most magnificent fruit aromas and flavours mingle with the sweet oak that held the previous year’s Grange.

If you can find any Bin 389 this year, the price will be $14-$18 a bottle. But savour the wine, compare it to what else is on the market, and perhaps you’ll wonder as I do why Penfolds don’t just put the price up to $20 and not worry about rationing. This is a great Australian red.

Although Bin 407 Cabernet Sauvignon sells for a slightly higher price than Bin 389 ($15-$19) and comes with 3 Gold medals, I suspect the difference reflects the scarcity of Cabernet rather than quality. This is a superb wine, totally in the Penfold mould with its solid structure, and comes with a great depth of pure Cabernet flavour. Grapes come from Coonawarra, McLaren Vale, Padthaway, and Clare Valley.

These are phenomenally good wines now reaching an international audience. They offer proven drinking satisfaction and great cellaring potential. Surely this is the best range of red wines in Australia.

The Mulligan and Hooper families established St Mary’s Vineyard, 15 kilometres due west of Coonawarra, in 1986. Now 20 hectares of vines flourish on an 80-hectare plot of the same terra rossa soil that marks the very best red-wine producing vineyards in Coonawarra.

Without wanting to be, Barry Mulligan finds himself embroiled in the controversy over where Coonawarra’s boundaries lie — an issue that must be resolved for the name to be used on wines exported to the EC.

Barry writes, “Having lived all my life in the Penola/Coonawarra area, I have a clear understanding of where Coonawarra starts and finishes and consequently have never considered St Mary’s to be part of Coonawarra Geographically.”

Like Brian Croser with his Sharefarmer’s vineyard, though, Barry Mulligan was not happy to be excluded while vineyards further from Coonawarra township than his own were included in the 1984 and 1991 definitions of viticultural Coonawarra.

The definition was a crude one, defined as the area within the ‘hundreds’ of Comaum and Penola. (‘Hundreds’ are survey boundaries, 10 miles square). Hence, Coonawarra was supposedly twenty miles long by ten miles wide. In fact, only about five per cent of the area was planted to vines, most of those clustered along a 15 kilometre strip heading north from Penola.

With his exclusion from Coonawarra, Barry applied to the Australian Wine and Brandy Corporation (AWBC) “for the registration of the viticultural region of Penola.” The application was accepted and the St Mary’s labels bore the appellation ‘Penola.’

Well, they did until a legal opinion pointed out a few anomalies: the town of Penola was not in the proposed region but in Coonawarra; Coonawarra township was in the Penola District Council area; and the ‘hundred’ of Penola was part of viticultural Coonawarra. This muddied the water and the idea of a viticultural region of Penola evaporated.

Under legislation recently passed in Federal Parliament, the AWBC, through its Geographic Indications Committee (GIC), has power to set regional boundaries. St Mary’s has now put its case to the committee.

Meanwhile, Ian Hollick, Chairman of the local viticultural council, says the recently formed GIC cannot make up its mind and has written back to the legislators asking for better criteria. The can of worms is now fully open.

The complexity of using place names in wine labelling has a life beyond new legislation and may finally be resolved not by the AWBC but by the courts as Trade Practices and common law issues are brought to light by aggrieved parties.

That’s a pity, really, as we drinkers all know what Coonawarra is: a bloody good red wine made from cabernet sauvignon, shiraz, or a blend of the two, with a distinctive richness and elegance and sourced from the red soil along the main road.

Coonawarra-attuned taste buds applied to Barry Mulligan’s St Mary’s reds are completely happy. The aroma, flavour, and structure connections are unmistakable.

What we see is that peculiarities of climate and soil making Coonawarra so distinctive are not so different 15 kilometres to the west at St Mary’s. Coonawarra may sit on a 700,000-year-old-limestone lagoon, but St Mary’s, on a fossilised limestone dune, probably one ice age younger than the Coonawarra formation, enjoys a similar climate and similar terra rossa soil. (Terra rossa is not just a literal term, but a geological term for red soil composed of weathered limestone).

No doubt there are differences between the two sites and they will be more fully appreciated as the years go by, just as we now know the differences amongst the various communes of Bordeaux despite an over-riding similarity.

I’ve visited St Mary’s and enjoyed its rugged, limestone-strewn slopes after the flatness of Coonawarra and tasted several vintages of reds and whites both there and back in Canberra.

St Mary’s House Block Cabernet ($23 odd), the flagship, is simply magnificent — both 1991 and 1992 vintages — big, rich, elegant reds for long-term cellaring. They really are hard to separate, in general terms from good Coonawarras.

The standard cabernet ($15 to $17) was excellent in 1991, perhaps even better in 1992, perhaps reflecting more mature vines (the vintage, generally, was not as good), perhaps reflecting the afterglow of a bottle consumed as I write.

As for the whites, I’ve yet to encounter one from the area that bears any great individual thumbprint as the reds do. But the just-released 1993 chardonnay shows a way above average richness of fruit flavour, cleverly mingled with oak.

Still, the main game is the reds. And I reckon Barry Mulligan, by his unique location, has an advantage over most Australian vignerons. He shouldn’t really worry too much about the name. As they say, a rose by any other name would smell as sweet.

Wine retailing

Why has wine retailing for so long remained the domain of independent operators? After all, most retailing decades ago fell under the control of large, efficient chains.

It’s a complex question and to some extent highlights the difference between wine and groceries. But perhaps more than anything it’s merely a remnant of a time when restricted licenses inhibited efficient marketing and distribution. That era is over.

Irresistible forces are at work changing the face of wine retailing forever. Just as the corner grocery disappeared in the 1960s, the independent liquor retailer of the 1990s is under siege and being decimated.

The phenomenon is less apparent in Canberra than elsewhere in Australia for the simple reason that unrestricted availability of liquor licences since 1975 allowed first of all the rise of strong, anti-orderly-marketing independents, then the gradual wider dispersion of wine sales through supermarkets.

At the production end, as long as a proliferation of wine makers produced more than was needed to satisfy demand, chaos ruled in the market place. Instead of brand marketing, we saw throughout the late seventies as table wine consumption became a way of life and right through until the end of the eighties, wine sales driven by discounting mainly at the hands of independent retailers riding a great but largely profitless wave of consumption.

The very profitlessness of wine making accounted for a steady wave of ownership changes and rationalisation. You could, for example, hear sighs (wheezes?) of relief as Rothmans and Phillip Morris, both of whom bought Australian wineries in the seventies, managed to bail out in the eighties – Rothmans off loading Chateau Reynella to Thomas Hardy and Sons, and Phillip Morris passing Lindemans to Penfolds, after shedding some historic vineyard assets at bargain prices.

The concentration of production ownership and better capitalisation we see today provides one of the major spurs to rationalisation at the retail end.

Well-capitalised producers determined to earn a return for shareholders by developing high-margin brands, take a different view of the retail trade than did the stock-flooded desperate producers of five years ago. Increasingly, success of a brand is under control of the producer and not the whim or palate of the retailer.

On that account alone, independent retailers are searching for a reason to exist.

The other major force, destined to counter the weight of a few large producers, is the determination of the big retailers, Woolworths and Coles, to grab what they see as their share of the wine market.

Woolworth’s Macs and San Remo outlets may not have the image of fine wine outlets. But the giant is only sleeping.

Where Coles appears to be getting clobbered by Woolworth’s in groceries, its more than 300 Liquorland stores are striding across the take-away liquor scene with a vengeance. The group claims to have lifted its share of Australia’s off-licence sales from around 25 to 29 per cent in recent years.

A good part of that growth is in bottled wine sales gained at the cost of independents. If a dalliance with mail order via the American Express Wine Club appears to have been unsuccessful, the first of its re-badged fine-wine stores, Vintage Cellars, at posh Mosman in Sydney, did well enough to encourage the opening of several more.

By the turn of the century, it seems likely the big supermarkets will have learned to retail wine effectively and will surely enjoy more than half the market. At that stage producers may find their brand-building power sapped by the immense bargaining power of these retail giants, who, like their British counterparts, may simply build their own brands if they cannot get what they want.

It’s unlikely, though, that the big retailers will ever effectively handle the wines of small producers. It’s just too hard to spread a hundred cases or less of a wine around so many stores.

And I suppose that leaves opportunities for independent operators prepared to forge allegiances with small makers and dabble in imports. The independent wine retailer of the future will have to be sharp enough to work on tiny margins on big-maker brands in competition against the supermarkets and add a little cream through offering the range and variety offered by smaller makers.

Extra service, local knowledge, and a willingness to work seven days a week may give well-located independents the edge they need to survive.

Wine drinking

Australia has been sobering up since 1981-82 .Between then and 1991-92 our per capita intake of pure alcohol fell from 9.8 litres to 7.7 litres. We’ve cut our intake of spirits slightly, beer dramatically (from 128.6 litres a head to 101.9 litres) and wine significantly.

Per capita consumption of wine peaked at 21.6 litres in 1985-86, reaching a low of 17.7 litres in 1990-91 and bouncing back to 18.6 the following year. The latest ABS figures show a trend towards declining consumption.

But producers are smiling at rising sales of bottled red, white, and sparkling wines. In 1993 Australian producers sold into the domestic market 46.2 million litres of bottled white (up 6.7 per cent on 1992) , 26.2 million litres of bottled red (up 5.4 per cent), and 26.5 million litres of bottle-fermented bubbly (up 4.9 per cent).

Quite clearly we’re drinking less wine but better quality, confirmed by those figures and symbolised by our ranking as 9th largest market for genuine Champagne. Where imports puddle along at just a few per cent of total consumption, we last year drank 919,000 bottles of the real thing, up 4.2 per cent on the previous year. Surely that’s a good economic indicator.

Wine making

Australia is a small wine maker, ranking 11th globally by volume.

We are out produced on a massive scale. Compare our 1992 output of 458.5 million litres with that of the ten biggest producers:

Millions of litres

France 6540.1

Italy 6868.6

Spain 3703.6

Former USSR 1,800.0

United States 1,562.0

Argentina 1435.1

Germany 1,340.0

South Africa 999.8

Portugal 755.5

Romania 750.4

Within Australia, South Australia remains king of wine makers and is projected to stay that way. It crushed an average 324,900 tonnes of wine grapes for the three years to 1991-2, compared to 122,900 for NSW, 94,400 for Victoria, and 10,600 for Western Australia.

ABARE forecasts our crush to grow from its three-year-to-1991-2 average of 552,971 tonnes to 712,400 by 1995-6.

Exports

Without the export boom, the Australian wine industry wouldn’t raise an onlooker’s eyebrow.

But by the mid eighties the infrastructure in terms of vineyards, wineries and superior technical skills were in place. No doubt the dollar devaluation came along at just the right time.

In 1983-4 exports were 8.9 million litres, growing to 10.8 million in 1985-6 and leaping to 21.3 million the following year. They’d doubled again by 1989-90 and in 1992-3 reached 103.2 million litres. The value was $293.2 million compared with imports of just $47 million.

Look at the break-up of exports and we can see why some wines are now scarce in Australia and why, after decades of wine-prices lagging behind CPI increases, producers now dare raise prices.

In the comparatively lucrative bottled wine market in 1992-3 export markets took 32.9 million litres of white compared to domestic sales of 44.1 million litres. For bottled red, the figures are: exports 24.7 million litres; domestic 25.3 million litres. I believe exports of bottled red wines has subsequently overtaken domestic consumption. Little wonder all our old favourites are out of stock.

According to the Australian and New Zealand Wine Industry Directory 1994 our biggest export earners in 1992-3 were Orlando-Wyndham ($78 million), Southcorp Wines ($68 million), BRL Hardy Ltd ($40 million) and Mildara Blass Ltd ($21 million).

The wine makers

The Australian and New Zealand Wine Industry Directory estimates 802 wine producers existed in Australia at the start of 1994.

Therein lies the difference between the wine industry and any other food product distributed through the national grocery network. Consumers are just not interested in 800 small biscuit makers, or soap suds factories. But they are interested in all shades of wine.

Nevertheless, the bulk of wine producing power has become concentrated in fewer hands over the last two decades as table-wine consumption and exports took off.

Four companies make 80 per cent of the wine we drink and export. Another half dozen or so account for at least 15 per cent, leaving less than five per cent of the market to almost 800 small producers.

The big four

1. Southcorp Wines

Bruce Kemp is the Chief Executive of Southcorp Wines, Australia’s largest producer and a subsidiary of Southcorp Holdings (formerly South Australian Brewing Holdings) Bruce estimates his group’s domestic market share at 30 per cent of the bottled wine market including sparkling wine and 22-23 per cent of the cask market.

He says the group currently exports 28 per cent of its production and expects that to reach 50 per cent by the year 2000.

Southcorp owns one of the most dazzling arrays of vineyards in the world, the jewel being its 1200 hectares in Coonawarra. Its brands include Wynns, Penfolds, Seaview, Tollana, Lindemans, Seppelt, Matthew Lang, Kaiser Stuhl, Tulloch, Hungerford Hill, Leo Buring. Stock, Woodleys, Killawarra, West Coast, Cattani and Rouge Homme.

2. BRL Hardy

BRL Hardy, an amalgam of the Berri Renmano Ltd and Thomas Hardy and Sons, is a public company headed by Stephen Millar. It claims a domestic market share of 23 per cent. Exports currently constitute one quarter of sales and, like Orlando-Wyndham’s and Southcorp’s, are projected to rise to fifty per cent by 2000.

BRL Hardy owns Houghton, Hardys, Berri Estates, Renmano, Houghton, Chateau Reynella, Moondah Brook, H.G. Brown, Leasingham, and Stanley.

3. Orlando-Wyndham

Perry Gunner estimates Orlando-Wyndham’s domestic market share at 20 per cent. Exports constitute 30 per cent of total sales and are projected to move to 50 per cent by the turn of the century. Domestically and on export markets the company’s most conspicuous success has been Jacob’s Creek, with production running at around 2 million cases annually. That makes it one of the world’s largest wine brands.

Orlando-Wyndham belongs to the French company, Pernod Ricard, and apart from Orlando and Wyndham Estate, owns the brands Morris, Richmond Grove, Saxonvale, Montrose, and Craigmore.

4. Mildara Blass Limited

Mildara Blass, a public company headed by Ray King, seems constantly to post the best profit figures in the industry. Hugh Cuthbertson of Mildara puts that down to a strong commitment to building high-margin brands. The commitment applies to exports as well. These currently make up 20 per cent of sales. On present trends that could be 40 per cent by the end of the century. The company’s domestic market share is about 10 per cent by volume.

Mildara Blass’s brands are: Mildara, Wolf Blass, Yellowglen, Jamiesons Run, Eaglehawk, Krondorf and Balgownie.

The middle-sized producers

After the very big producers, it’s anyone’s guess as to who comes next. But there is a solid cluster of biggish wineries of similar market presence: Yalumba, McWilliams, DeBortolis, and Brown Bros, followed by Rosemount, Peter Lehmann, Miranda, The Alambie Wine Company, Angoves, Rosettos, and Rothbury.

Small producers

Then follow hundreds of small producers, some crushing minuscule quantities. But if the big makers satisfy our thirsts it is so often the small makers pioneering new and usually cool growing regions.

These small makers add not only spice but at times are on the cutting edge of achievement. Without small makers, for instance, we would not have the lovely pinot noirs of the Yarra Valley and Mornington Peninsula.

What this band of small makers demonstrate by their success is the romantic attachment so many drinkers have to wine.

South Australia still produces more wine than any other state and looks like maintaining its dominance. In the three years to 1992 it averaged 59 per cent of the national crush of around 553 thousand tonnes. By 1996, according to ABARE predictions, it should still account for 58 per cent of a 712 thousand tonne crush.

It appears South Australia dominates premium wine production even more than it does total output. By my back-of-envelope figurings, the state currently accounts for almost three quarters of fine-wine output. It may lose about 3 per cent market share to NSW over the next three vintages, but in absolute terms its growth in premium grape output dwarfs that of any other state.

The back of the envelope tells me South Australia’s 148 thousand tonnes of grapes from premium growing areas will bloom to 213 thousand tonnes by 1996. Compare that to NSW’s increase from 29 to 51.1 thousand tonnes, Victoria’s 18.1 to 26.2 thousand, and Western Australia’s 7.6 to 12.5 thousand

Thanks to the export push, Australia’s wine-grape output, between 1992 and 1996, will have grown by about 160,000 tonnes, equivalent to roughly 11.2 million dozen 750 mL bottles.

About two thirds of that growth will come from premium growing areas with the balance from high-output stretches of the Murray and Murrumbidgee Rivers.

The swing towards premium areas reflects not just export demand but a changing domestic market as well. We now export as much bottled red as we sell locally and whites will soon be the same. Domestically, bulk wine sales are falling while, in the past year at least, bottled reds, whites, and sparkling wines have all shown strong growth. Clearly those investing in vineyards are punting that the trend to higher quality here and overseas will continue.

I suppose it’s natural that expansion should be greatest where vines have a good track record and, just as important, there exists the infrastructure to maintain the vines, harvest grapes and make wine.

Hence, the explosive growth in established areas in South Australia. ABARE projects these tonnage growths (in thousands) between 1992 and 1996: Barossa Valley 54.3 to 71.2; the central area embracing part of the Adelaide Hills but mainly McLaren Vale and Langhorne Creek 33.2 to 53; Clare Valley 15.9 to 22.2; Coonawarra/Padthaway and other isolated pockets in the region 44.5 to 66.6.

In absolute tonnage, then, Coonawarra/Padthaway shows the greatest growth of any premium wine growing area in Australia and, I predict, in the years ahead it will finally outstrip the Barossa in total crush.

The shift to higher quality is reflected, too, in ABARE projections tipping extraordinary growth for the best wine varieties.

Amongst reds, cabernet sauvignon and the related Bordeaux variety, merlot are set to increase from a three year average to 1992 of 44.5 thousand tonnes (8 per cent of the crush) to 80.3 thousand tonnes in 1996 (11.2 per cent of projected crush). Cabernet on its own is expected to grow from 40.5 thousand tonnes to 72.6 thousand tonnes.

That leaves shiraz, by a small margin, the most important red variety, with growth expected from 60.8 thousand to 80.2 thousand tonnes.

Chardonnay production should rocket in the same period from 43,448 to 89,200 tonnes – an increase of about 3.2 million cases of finished wine. By 1996 Semillon (54,700 tonnes) looks like overtaking riesling (52 thousand tonnes) as the second biggest white grape. Punters predicting the demise of riesling note its projected growth of over 8000 tonnes in the four years to 1996.

What the bare figures don’t reveal, of course, is the phenomenal amount of work being done to lift fruit quality in vineyards. Not only are we seeing a dramatic shift to better growing regions and premium grape varieties, but all along the riverlands (a dirty word to so-called connoisseurs) we’re seeing quality increases brought about by better management.

No, Griffith will never make a cabernet the equal of a Coonawarra, nor will Sunraysia make Mornington Peninsula chardonnay. But quality from warm, irrigated areas is rising steadily. Just taste Peter McLaren’s Salisbury Estate wines to see what can be done.

What we’re witnessing now, on a large scale, is the lifting of the average quality of Australian wines both in bottle and bulk. Wine making techniques were pretty well perfected a decade ago. It’s the revolution in the national vineyard now delivering a tweak to quality.

Seemed like a dumb idea at the time – releasing Wynns new vintages on a Wednesday and calling it Wynnsday. Instead, five or six years on cynics eat crow while the trade and consumers alike buy up on something altogether more tasty .

The success of ‘Wynnsday’ demonstrates the increasing quality of Australian wines, the better capitalisation of the industry, and a growing sophistication of how producers market the product. It also marks a fundamental shift in power from the retailer to the producer, in the process strengthening the big supermarket chains at the expense of independent operators, now witnessing (most without realising it) the demise of their dominance of the fine-wine market.

The power shift occurs because in creating strong brands, producers trigger demand directly with consumers who then buy what they want wherever best suits them, assuming good distribution. And that’s where ‘Wynnsday’ as a marketing tool has become so effective.

Wynns not only captures the attention of wine drinkers, but gets the trade onside. Hence the flurry of retailer advertising on top of the corporate push.

Good marketing does this all the time. But in the past there have been few notable successes in the wine industry where so many sales have been driven by retailers discounting into a glutted market. Rationalisation at the production end is the main forces bringing about brand creation.

Of course, Wynnsday would not succeed were it only a gimmick. Exceptionally high quality underpins its popularity. The whites can be seen as cheap for the high quality delivered. They fit into mainstream styles and don’t really bear any flavour characteristics we can put down to the region. But who cares? White varieties in Coonawarra are planted largely in secondary locations, leaving the best plots to the area’s great specialties, the reds.

The shiraz and cabernet based reds are distinctive wines now making a mark globally. These are stamped with a character unique to Coonawarra. And in Michael Hermitage, John Riddoch Cabernet and the Centenary shiraz cabernet blend we see exempary reds built for long-term cellaring.

In short, these are wines demanding review, products of perhaps the greatest high-quality wine estate in the world. Southcorp Wines now owns around 1200 hectares in Coonawarra from which the Wynns wines are sourced.

Wynns Coonawarra Estate Rhine Riesling 1993

Terrific medium-dry, fruity, crisp drinking often specialing at around $7.

Wynns Coonawarra Estate Chardonnay 1992

Very much in the mainstream Australian chardonnay mould: a rich, full-bodied dry white with ripe fruit flavours and a strong influence of oak both in the fermentation process and subsequent maturation.

Wynns Coonawarra Estate Pinot Noir 1991

A pleasant pinot for current drinking and short-term cellaring. However, it’s not in the class of shiraz and cabernet from the area. I predict it will disappear from the range.

Wynns Coonwarra Estate Hermitage 1992

A very good red at the price, showing strong regional flavour. After the rich, tannic 1990, and smooth, supple 1991, the 1992 displays flavours expected of a cool vintage being leaner and more tightly structured. Great value.

Wynns Coonawarra Estate Cabernet Hermitage Merlot 1991

Here’s a blend that’s been looking for an identity over the years beginning as a mix of leftovers but moving in recent times to a pre-conceived style. This vintage shows more sweet fruit than the 1990 did and I rate it a better wine. A touch more richness and flesh and it’ll be a boomer.

Wynns Coonawarra Estate Cabernet Sauvignon 1991

An absolutely brilliant red at the price ($13 to $15 a bottle) with rich, classic Coonawarra berry flavours. Back to text-book Coonawarra after the unusually rich and tannic 1990s.

Wynns Coonawarra Estate John Riddoch Cabernet Sauvignon 1991

Like the above reduced to an essence. Quite simply a great wine for long-term cellaring and now perceived as exceptional on world markets.

Wynns Coonawarra Estate Michael Hermitage 1991

Another ‘essence’, of exceptional richness and power. Overwhelming now, but fifteen years plus in the cellar will see the emergence of a ‘Coonawarra first growth’.

Wynns Coonawarra Estate Centenary Shiraz Cabernet Blend 1991

A magnificent blend assembled by wine maker Peter Douglas to mark the 100th anniversary of John Riddoch’s planting of vines in Coonawarra in 1891. This is an opulent, fleshy red, solidly structured for long cellaring – a unique Australian blend with Coonawarra’s distinctive flavours.

The wines were widely distributed early this month and readers should find no difficulty finding the riesling, chardonnay, pinot noir, hermitage, or cabernet hermitage merlot. The cabernet is scarce but still available at most outlets. The rest are on allocation and should be grabbed at the first opportunity. Many retailers have already sold out.

The creator of Grange Hermitage, Max Schubert, died last Sunday.

Max was a genius whose medium happened to be wine. His achievements and contribution to our cultural life are enduring and go far beyond the wines he made.

Like Patrick White and Sydney Nolan, Schubert’s genius blossomed in the early 1950s despite a post-world-war-two Australian culture that could hardly have been more hostile to originality and unconventional ways.

The seed of genius was always there waiting to bud. Despite childhood poverty and little formal education, Max saw a future for himself:

“I was very keen to do something that would allow me to fulfil fantasies that I had always had… I always had a terrible imagination and I used to imagine myself as being really somebody. I always had this in front of me. I wanted to get out of the rut we were in. We were poor and I wanted to make a name for myself. I always was somebody of note in my own mind.” (David Farmer-Chris Shanahan interview with Max in his office at Magill, February 18, 1992).

Max was born on February 9, 1915 :

“I was born in a small country place called Moculta (Barossa Valley). It was a village and it was originally peopled by a German farming community…

“My early recollections were living in a cottage which also belonged to… the Linke brothers (his mother’s family) and I remember these homes were built of mud and straw… and some of them including ours had a thatched roof of straw. I don’t know whether you can visualise this, but I chiefly remember also the large kitchen at my Grandfather’s place where they cooked meals for all these people, the tradesmen they had in and the wonderful smell of curing bacon, ham and German-style sausages when you walked into the kitchen there. Also this was mixed with coffee. There was all this coffee on the great wooden stoves they had there and although I was only two or three years old, it’s quite a vivid memory for me up there. Wonderful smell of bacon. Every cottage and… they used to have to kill their own meat and every cottage in fact had a smoke house for maturing bacon and German-type Bratwurst and that sort of thing. And I remember it used to be used also as place of discipline for unruly children And many times I found myself in the damn smokehouse – was a terrible ordeal really.

“… they were persecuted Lutherans, you know all the original families and they established this community. There were many of them around you know like this. These German communities. There was no state school and they had to provide their own education and my mother and father were both educators in these community schools and my elder two brothers went to the German Schools for a little while until we moved to Nuriootpa. That was when I was about four years old.

“…Well, I went to the local primary school and I eventually went to the high school and I finished with an Intermediate Certificate… it was something to have an Intermediate Certificate in those days because students left school, some went until they were twelve years of age – fourteen was the maximum. The depression – everybody had to try and earn some money. I know I did. Worked for the local greengrocer also who grew his own vegetables. I used to pull the carrots, wash them and bunch them up. All after school… nobody had any money.

Max left school at 15 and got his first full-time job (7 am until 5 pm) doing odd jobs at Penfolds, Nuriootpa.

“Well I had this fetch and carry job for about six months and then they appointed the first wine chemist as you called them in those days up there and and that was because they had no option. They still believed in the old traditional methods. They were forced to put some science into the operation because so much bacteria affected the wines and they didn’t know how to control it.”

Such was Max Schubert’s introduction to wine making. From odd-jobs boy he was taken under the wing of Penfold’s first ‘wine chemist’.

Little could Herr Farsch know the destiny of his protege. Max went on to head the Penfold wine making team after a much-hated stint with the 6th Division during Word War II.

Max himself has eloquently related the development and controversy surrounding Grange in a paper delivered to a Symposium at the Australian National University in 1979.

Max’s reputation was already established in Australia by then. But the international story was yet to unfold. And the depth of his genius had not yet become widely appreciated.

If we view alcohol as merely a social drug and the form in which we take it (wine, beer, or spirits) as irrelevant, then we have to conclude federal taxing policy is highly discriminatory against beer and spirit drinkers.

By my reckoning, if you drink cheap Scotch Whisky, you’re paying about $50 tax for every litre of pure alcohol consumed. Beer drinkers are less heavily slugged at about $28.60 a litre. Drink $10-a-bottle wine and pay around $22.60. Trade down to 4 litre casks and hand the taxman just $4.08 for every litre of pure alcohol.

Beer and spirits fare worse than wine because they cop a triple tax slug where wine gets only two.

Of the $23.99 you pay for a slab of VB stubbies, the retailer pockets 80 cents, the brewery $10.56, and the tax man $12.63. Of that, $6.40 is excise levied by the federal government at a rate of $14.53 per litre of alcohol; $3.56 is federal sales tax based on 21 per cent of the net selling price to the retailer; and $2.67 is ACT licence fee, calculated at 13 per cent of the post-sales-tax cost to the retailer.

Buy a bottle of McCallum’s Scotch Whisky on special at $17.99 and the retailer gets $1.70, the distiller $2.36, and the tax man a greedy $13.93. The federal excise component is $9.56 (at $33.84 per litre of alcohol plus 8 per cent of the F.O.B. value); federal sales tax $2.50; and ACT licence fee $1.87.

On a $10 bottle of wine, the retailer keeps $2, the wine maker $5.80, and the taxman $2.20, made up of $1.28 federal sales tax (22 per cent of the cost to the retailer), and ACT licence fee of 92 cents (13 per cent of the post-tax cost to the retailer.)

The cask drinker gets a cheap high by comparison. Of the $6.99 paid for a Golden Gate 4 litre wine cask, the retailer retains $1.06, the wine maker $4.30, and the tax man $1.63 (95 cent sales tax, 68 cents licence fee).

The bottom line is the net retail price we pay per litre of pure alcohol for our preferred drug. That works out to about $17.47 for cask wine, $102.56 for $10-a-bottle wine, $54.40 for full-strength beer, and $64.65 for ‘cheap’ Scotch.

The high price paid by bottled-wine drinkers surely tells us there’s more to wine than just the drug alcohol. Scotch drinkers, too, appear to be a dedicated lot. And it must hurt to know three quarters of the money paid for the pleasure of the odd wee dram goes to the tax man.

Scotch drinkers please note, too, a major change about to take place in the market place. You’ll very shortly see prices fall by about a dollar a bottle. But don’t get too excited. There’ll be less in the bottle.

From April 1, United Distillers Limited (UDL)(with 40 per cent of the Scotch market) plans to sell all of its Scotch brands (with only a few exceptions amongst slow-moving pure malts) in 700 mL bottles.

Because excise is based on volume of alcohol and sales tax and licence fee are multipliers on top of excise, cutting the bottle size by 50 mL reduces the tax on a 37.1 per cent alcohol Scotch by almost 70 cents a bottle. In the case of a fighting brand like McCallum’s the retailers landed cost will fall from around $16.29 to $15.61.

That means fighting brands will soon be specialling at $15.99 and $16.99 instead of $16.99 and $17.99. And as UDL owns many brands, including Johnnie Walker and Vat 69, Scotch drinkers will see prices fall by about $1 a bottle across the board.

UDL won’t be alone in moving to 700 mL bottles. Marketing manager Warrick Duthy tells me that over the last three years 700 mL Scotch grew from almost nil to 11 per cent of the market. His group resisted the move at first and preferred to see 750 mL as the standard.

But the commercial reality is that a 700 mL bottle sells for a dollar less than 750 mL and consumers have shown they care only about the dollar not the 50 mL.

UDL will be the first to convert totally to the new size. But glass manufacturer AGM has already announced the imminent availability of a 700 mL bottle. That will allow UDL’s smaller competitors to join the fray. That leaves the other major distiller, Continental Seagram, no choice.

Intensified competition is sure to produce low prices. And the Scotch drinker will no doubt be astute enough to work out the difference between 700 and 750 mL bottles.