Not the least of the pressures facing winemakers is the constant demand for capital. In an industry notorious for low or negative returns to investors — just ask any of the estimated forty per cent of Australia’s wineries currently losing money – this means a reliance on external funding.

That funding might come from the day jobs of the owners, through debt or though private or public equity raising.

Ambitious, expanding wineries in particular feel this pressure. But once a business moves from private funding to publicly listed equity, as Petaluma did, its fate all too easily slips from the control of its founders.

Brian Croser placed Petaluma in this position and, sure enough, in 2001 brewer Lion Nathan swallowed the enterprise he’d founded in 1976.

Croser initially stayed on under the new ownership but departed after the 2005 vintage.

Then, a few weeks back, the Petaluma team staged a three-decades of Petaluma tasting to mark the company’s thirtieth anniversary. Brian was conspicuously absent. So, too, was any statement of a future vision. But the wines – including the 2006 riesling, the first made entirely by new boss, Andrew Hardy – delivered their own testimonial.

And what did the testimonial say? To my palate, the message was that Petaluma remains amongst Australia’s best producers of riesling and cabernet; shows exciting potential with its recently introduced shiraz – and to a lesser extent viognier — from Mount Barker in the Adelaide Hills; makes outstanding chardonnay and sparkling wine, but not, perhaps, at the cutting edge as they once were.

From the earliest days, Croser’s vision was to match variety to region and, within regions, to select what he later called ‘distinguished’ sites. Riesling and cabernet sauvignon came first with the purchase of the established Hanlin Hill Vineyard in the Clare Valley and Evans Vineyard, Coonawarra (supplemented later by the Sharefarmer’s Vineyard).

To my palate these remain the stand out wines. At the thirty-year tasting, the six rieslings from 2001 to 2006 displayed a dazzling, consistent brightness of colour, aroma and flavour, thanks to the use of screw caps.

These showed notable vintage variation with all round quality best, to my taste, in 2002, 2005 and 2006. As well, an appealing ‘toasty’ aged character was apparent in the 2001 and subtly so in the sensational 2002.

The cork-sealed wines showed considerable bottle variation and distracting flaws. But even so, the 1999, 1998, 1991 and 1982 were delicious, but overshadowed by the beautifully fresh, but aged, 1979 and 1980.

What this says is that screw-cap sealed wines of the calibre of the 2005 and 2006, both still in the market, will provided extraordinary drinking for decades if well cellared.

The first two Petaluma Coonawarras, 1979 and 1980, made a statement of the era, the district and the blend. Both are blends of shiraz and cabernet made in the medium bodied style of the time. They’d travelled well through the years and still show that distinctive, appealing Coonawarra berry character.

The style changed with a switch from shiraz to merlot in the blend and in the late eighties displayed a little more body thanks to riper harvesting.

As a group they’d aged gracefully and retained terrific regional and varietal definition. To me highlights were 1986, 1990, 1991, 1992, 1995 and 1996 with a very special rating to the 2002 and 1998 vintages.

Petaluma Hanlin Hill Clare Valley Riesling 2006 $19-$23
Brian Croser fermented Petaluma’s first riesling – a 1976 from Mitchelton Vineyard, Nagambie – in a spent Maralinga rocket-fuel tank. From 1979, having acquired the Hanlin Hill vineyard, Clare Valley, he made the first of the single-vineyard Petaluma rieslings that’ve given the wine its well deserved blue-chip status. At a recent tasting of all the rieslings the oldest and youngest vintages stood out like bookends as if to say, young or old, this is a great wine. The 1979 and 1980 were both wonderfully fresh, albeit with the delicious patina of age. The 2005, the last made by Croser, is a classic. And 2006, Andrew Hardy’s first, is spectacularly aromatic and superb.

Petaluma Coonawarra 2002 $42-$58
2002 was one of the coolest seasons on record in much of eastern Australia. This boosted flavour intensity of reds in our warmer areas but in cool Coonawarra many vineyards seemed to struggle for ripeness – a character reflected in the leafy, not-quite-ripe character of many of the wines. Petaluma, however, achieved ripeness in its tiny crop to produce what to me is one of the finest since the first vintage in 1979. At a tasting of every vintage a few weeks back it appealed for its enormous flavour concentration in the elegant, firm, Coonawarra mould. It’s a classic, destined to give drinking pleasure for decades to come.

Copyright © Chris Shanahan 2006 & 2007

In the last few years the very best Canberra district wines have increased in number and quality. Importantly, more wines have streaked away from the me-too ranks to stand comparison with the best of similar styles from Australia and, in one instance, the world.

Having judged the local regional show for some years the lift in quality has been palpable – as shown in a comparison of the results from last week’s event with those from 2005.

The number of entries increased by eleven per cent from 207 to 230. But the number of medal winning wines soared by forty-four per cent from 63 to 91 and the medal strike rate lifted from thirty per cent of wines entered to forty per cent.

Shiraz, to me, remains the greatest strength, not just for Canberra but for neighbouring districts eligible for the show. The 2005s in particular offer pure drinking pleasure in a generally supple, plush, elegant style.

We revelled our way through eleven 2005 vintage shirazes and awarded a remarkable four gold, two silver and four bronze medals.

Two of the gold medallists – Meeting Place and Mount Majura — are from Canberra, with one each from Gundagai (Paterson’s) and Young (Chalkers Crossing).

Meeting Place, our top ranking of the four gold medallists went on to win trophies as best shiraz, best red of the show and best wine. It’s simply stunning. Unfortunately, Hardy’s, owner of the Meeting Place brand, say they plan to release it late next year – a decision completely out of touch with the drink-now pleasure of this wine style.

The 2004 and earlier vintage shirazes were a joy to judge, too, producing thirteen medals, including two golds, from twenty-eight entries. Mount Majura’s delicious 2004 topped this group, followed closely by McWilliams Barwang Shiraz Viognier (Young) with silver medallists Meeting Place 2003, Chalkers Crossing 2004 (Young), Lambert Reserve 2004 and First Creek Shiraz Viognier delivering lovely flavours.

Canberra held a monopoly on the riesling honours and did it with real class. Surveyor’s Hill and Brindabella Hill, both from Hall and both made at Brindabella Hills, earned gold in the 2006 field, with Ravensworth (Murrumbateman) a tad behind on silver. And Helm of Murrumbateman earned gold and silver for a couple of delightful 2005s.

Those top rieslings easily bear comparison with the best from Clare or Eden Valley – the usual Aussie benchmarks. With a bit more attention to winemaking detail some of the poor performers in this year’s show – oxidation was the main problems – could be on the winners’ podium. Clearly our district suits this variety.

The top chardonnay of the show McWilliams Barwang 2005 came from Tumbarumba – continuing a consistent winning thread for this very cool area. The other gold-medal chardonnay was Centennial Vineyards Woodside 2004 (Southern Highlands).

Three very attractive cabernets earned gold. The deep, rich trophy-winning McKellar Ridge Cabernet Sauvignon Cabernet Franc 2005 (Murrumbateman) came in a nose ahead of Grove Estate The Partners 2005 (Young) and McWilliams Barwang 2002 (Young). As a group, however, the cabernets lacked freshness and generosity.

A couple of exciting viogniers – Meeting Place 2005 (silver) and First Creek 2005 (gold & trophy) – showed yet again Canberra’s great potential for this variety. And the success of Ravensworth Sangiovese 2005 (gold and trophy) suggests a good future with this Italian variety.

For the full list of results go to rncas.org.au.

Ravensworth Canberra District Sangiovese 2005 $22
I recommended this now gold medal winner back in March as a wine that “just needs a little time in bottle to emerge as a vibrant and sophisticated expression of the variety”.  As noted earlier this is one of the best Australian shots I’ve seen with this Italian variety, standing out for its bright, pure fruit aroma and flavour and taut, fine tannin structure. It’s developed beautifully with six months in the bottle and should continue to build in complexity and interest for many years. It bowled us judges over at last week’s Canberra Regional Wine Show. www.ravensworthwines.com.au.

Surveyors Hill Canberra District Riesling 2006 $25
Leigh Hobba’s Surveyors Hill vineyard produced the fruit for this stunning trophy and gold medal winning riesling. It was made for Leigh at Roger and Faye Harris’s Brindabella Hills Winery, about a kilometre from the Surveyors Hill vineyard. Leigh tells me that each year Roger gives trainee winemaker, Brian Sinclair, a project wine of his own and in 2006 this was it. The wine shows pristine varietal aromatics and intense but delicate palate with beautiful, fresh acid balance. It’s classic riesling and could hold its own in any company. Release is imminent, enquiries to Leigh Hobba 6230 2046

First Creek Canberra District Viognier 2005 $20
Expatriate Canberran, Jim Chatto, makes First Creek Viognier at the Monarch Winery, Pokolbin, from fruit grown on the Fischer family’s Nanima vineyard, Murrumbateman. It was one of two outstanding viognier’s exhibited at the Canberra Regional Show. In contrast to the purely varietal silver-medal runner up, our gold-medallist was a notably more complex wine showing the textural, aroma and flavour impacts of barrel fermentation beautifully integrated with the plush, distinctive, apricot-like viognier flavour. Like most top-notch viogniers, it’s a wine of huge flavour impact and should be savoured in small, intense doses. Cellar door phone 02 4998 7293.

Copyright © Chris Shanahan 2006 & 2007

Believe it or not, there’s a move away in some wineries from the ‘sunshine in a bottle’ or ‘fruit bomb’ styles that propelled our wines to international success.

That it can be desirable for fruit to be ‘dumbed down’ — to use Kamberra winemaker, Alex McKay’s, words – can be tasted in some of our best top-shelf chardonnays, including Kamberra’s current release 2004 from Tumbarumba.

In chardonnays of this style, a combination of fruit sourcing and winemaking practice turns down the volume on exuberant peach and melon varietal character to deliver a more complex flavour – a matrix permeated by fruit but significantly influenced by winemaker inputs.

Proponents of these styles argue that ‘fruit bomb’ wines are one dimensional, boring, not compatible with food and, in their emphasis on ripe flavours, come all too often with forbiddingly high alcohol readings.

The quest for more subtle, complex, food friendly wines usually includes at its heart the French concept of terroir – the idea that a wine expresses in its flavour and structure the sum of all the influences on a certain vineyard in a certain location.

For Leanne De Bortoli and husband, Steve Webber, in the Yarra Valley, the shift away from ‘sunshine in a bottle’ began about five years ago. Says Steve, “We changed our thinking about wine. We were winning awards but felt that wine should taste of where it’s grown. It should have a sense of place. Anyone can make wine expressing sunshine and oak”.

The change of thinking led to alteration of the whole wine-production chain – from management in of the company’s Dixon’s Creek Vineyard to fruit handling and sorting, and to fermentation and maturation regimes.

As a result, the wines have become less alcoholic, less oaky, more complex and more intensely fruity at the core – without being in the brash ‘fruit bomb’ mould.

Change began in the vineyard, most radically with the re-establishment of some areas from west and north facing slopes to east facing slopes. Where earlier thinking had been to maximise sun exposure on those northern and westerns slopes, experience had shown that these captured too much sun, especially in the afternoons, producing over ripe and, at times, sunburned fruit.

Sections of the vineyard not replanted – including terrific old vines dating from 1971 –have been significantly retrained to restrict yields and to produce leaf canopies that encourage ripeness while protecting fruit from direct sun exposure.

Under the new viticultural regime, Steve has been successfully harvesting grapes at lower sugar levels (hence, lower alcohol content in the wine) without losing ripe, well-defined, varietal flavour.

These grapes, of course, are at the heart of the wines. They’re hand picked into small buckets, to avoid breaking, then hand sorted, to eliminate sub-standard fruit, before being tipped – not pumped – to vessels for fermentation by indigenous yeasts.

The combination of grape quality, earlier picking, gentle handling, minimal intervention, spontaneous fermentation and careful use of oak is doing the trick – delivering wonderfully appealing, complex wines of subtlety rather than in-your-face fruitiness.

While the Aussie fruit-bomb style remains valid, what Leanne De Bortoli and Steve Webber demonstrate is that subtle, vineyard driven wines can deliver a higher level of drinking pleasure.

It’s wines like those being made by De Bortoli in the Yarra Valley that can drive the next, much needed, regionally focused phase of Australia’s export drive.

De Bortoli Yarra Valley Sauvignon 2006 $22
If one wine displays – deliciously — the fruit muting underway at DeBortoli Yarra Valley, it’s sauvignon blanc. They’ve even pruned the name to ‘sauvignon’, indicating that’s something’s up. And what’s up begins with low yields in the vineyard, hand picking, gentle handling and spontaneous fermentation (i.e. no cultured yeast added) in old oak barrels. Instead of the more customary brash, bright and pungent cold-fermented sauvignon blanc, De Bortoli’s — while still refreshing, juicy and unmistakably sauvignon — is more subtle. It’s like a varietal echo, muffled by a textural richness and secondary flavours derived from barrel fermentation and maturation, lees contact and yeast tag-team behind the ferment. Released October.

De Bortoli Yarra Valley Reserve Release Syrah 2004 $35 – $38
Few reds pulse and ripple across the palate like this sensational 2004. It’s opulent, silky, velvety, plush, juicy, utterly compelling, seductive and irresistible. What’s behind it? The great fruit of low yielding, mature vines (planted 1971); hand picking; hand elimination of all but perfect grape bunches; a high level of whole-bunches in the ferment (equals brighter fruit and gentler tannin extraction); and maturation in well-matched oak barrels. If you’re looking for something really special, this is as good an investment in pure drinking pleasure as you’ll find. This is one of the most exciting wines I’ve tried in years.

Copyright © Chris Shanahan 2006 & 2007

Talking to a few local winemakers recently led to a little flurry of samples arriving on the tasting bench. While far from a comprehensive review of what the district has to offer, tasting the wines confirmed a view that Canberra excels with shiraz, looks increasingly good with riesling and offers pretty good value at the cellar door outlets sprinkled around our large district.

Sipping through an impressive shiraz line up, word came through that Lerida Estate Lake George Shiraz 2005 and Lambert Wamboin Shiraz 2004 had both won gold medals at the recent NSW Small Winemakers Wine Show, held in Forbes.

Both missed my tasting. But on their gold medal performances would’ve added to a very solid line up.
Clonakilla Shiraz Viognier 2005 led the charge (see Top Drops), but that’s no surprise for a wine that’s been in the making for thirty years and in its present style, more or less, since 1992.

While there’s considerable variation in the local shirazes, there’s a consistent thread dictated by our comparatively cool climate. This means varietal expression built on fragrance plus peppery, spicy, savoury flavours and fine-boned structure.

For those choosing, like Clonakilla, to include a portion of the white viognier in the blend, there’s an extra floral lift to the aroma and suppleness to the palate. In some wines, however, the viognier weighs in a little too heavily, throwing things off balance.

But as Tim Kirk found at Clonakilla in the mid nineties, getting the right balance is a matter of time and practice – at the rate of only one vintage per year.

Kamberra’s Shiraz Viognier 2004 goes close to the mark although I’m sure the ever-restless Alex McKay has even better wines on the way through. Bryan Martin’s Ravensworth Shiraz Viognier 2005, after a few months in bottle, seems to have tilted a little too far in viognier input although it’s still an appealing drop.

Of the straight Shirazes tasted, Meeting Place 2003 (from Kamberra) offers solid, tasty value at $15; Brindabella Hills 2004 is a standout (see Top Drops) and Clonakilla Hilltops Shiraz 2005 (from nearby Young) is also outstanding, albeit in a considerably more robust mould than the Murrumbateman wine.

A couple of local merlots looked above average, if green in comparison to the supple, ripe shirazes – but that seems to be the case generally in Australia. I rated the Gallagher 2005 a nose ahead of the elegant Brindabella Hills 2004.

The very pleasant, vibrant, cedary/leafy Brindabella Hills Cabernet Sauvignon 2004 won’t challenge Coonawarra but, to my taste, delivered more appeal than Helm Cabernet 2003 or Premium Cabernet 2003.

Canberra’s 2006 rieslings offer great excitement. Although I rated Gallagher 2006 a touch ahead of Helm Premium 2006 at the top, it was a close call — with another four wines in hot pursuit: Ravensworth 2006, Brindabella Hills 2006, Clonakilla 2006 and Helm Classic Dry 2006, followed by another appealing wine, Dionysus 2006.

Meeting Place Viognier 2005 is a full, tasty example of this Rhone grape variety. But it was outclassed by the amazingly deep, fine, slippery Clonakilla 2005.

The sole sauvignon blanc tasted, Brindabella Hills 2006 (Top Drops), is a ripper and Kamberra Tumbarumba 2004 (30) is a lovely example of complex, cool-grown, barrel fermented chardonnay.

While these wines provide a tasty snapshot of what Canberra produces, there’s lots more. We’ll look at these after the regional show in late September.

Brindabella Hills Canberra District Sauvignon Blanc 2006 $15
It seems appropriate that Dr Roger Harris — the scientist whose CSIRO colleagues identified methoxypyrazene compounds as sauvignon blanc’s pungent flavour source — should make such a wonderful expression of it. The 2006 is just delicious – fresh and zesty with juicy, refreshing tropical-fruit flavours to enjoy over the warm months ahead. It’s a bargain at $15, cellar door. And at $25 Brindabella Hills Shiraz 2004 offers the fragrant, fine-boned, savoury richness of cool climate shiraz. To my taste this is the best yet from Roger and Fay Harris’s vineyard on the lower, warmer Murrumbidgee Valley side of Hall.

Clonakilla Canberra District Shiraz Viognier 2005 $78
Canberra’s most celebrated wine easily topped a tasting of local shirazes at Chateau Shanahan this week. That it did so comes as no surprise. And it’s worth remembering, too, that like most style benchmarks Clonakilla is no overnight sensation. Shiraz from the Kirk family vineyard was blended with cabernet from the mid seventies until the first straight shiraz appeared in 1990. In 1992, Tim Kirk added viognier to the blend (from vineyards planted in 1986) and hit the spot with international critics consistently from the late nineties. What we see now is a highly perfumed, silky red of great intensity and remarkable finesse.

Meeting Place Canberra District Viognier 2005 $15
It’s grown on a new vineyard at Holt, it’s irrigated with grey water from the lower Molonglo treatment works and it’s already recognised as one of the best value viognier’s in Australia. If it lacks the restraint and depth of Clonakilla’s $50 version, it pleases with, pure, full, citrus/apricot flavour and thick, viscous texture of the variety — beautifully made at Kamberra Winery by Alex McKay. Alex believes that the wine will become increasingly intense and interesting in future vintages as the vines mature. While it’s probably best to enjoy the 2005 as a young wine, the 2004 is still remarkably fresh and enjoyable.

Copyright © Chris Shanahan 2006 & 2007

After the decade-long, tenfold expansion described here last week, Canberra’s wine industry remains – from a drinker’s perspective, anyway — principally a boutique affair.

While the announcement of Hardy’s Kamberra project in 1997 encouraged several large vineyard plantings and delivered us one quite big and outstanding winery, the district’s identity still comes primarily from the wines of small producers.

If their numbers approximately doubled in that ten-year period – from about twenty to forty – the scale of individual operations remains tiny. According to the Australian Wine Industry Journal thirty-two of our forty-odd local vignerons own twelve hectares or less of vines each – and nineteen of those have less than five hectares.

Of the older, established operators, only Doonkuna touches the still modest twenty-hectare mark, thanks to a substantial expansion in the late nineties under Barry Moran.

The Journal also tells us that between 1998 and 2000 – at the peak of Australia’s vine-planting boom – we gained four substantial new vineyards that subsequently developed their own wine brands as well as selling grapes to other winemakers.

These were all established between Hardy’s announced arrival and the opening of its Kamberra winery, Watson, in 2000. By that time Long Rail Gully, Four Winds and Shaw Vineyard Estate at Murrumbateman had commenced planting twenty-two, twenty-one and thirty-two hectares respectively.

At nearby Hall, Wily Trout planted fifty hectares and at Holt, Kamberra, in a joint venture with Alan and Helen Anderson, established eighty-three hectares that deliver the core of Kamberra’s local intake.

But because the Journal records only winemaker plantings, it doesn’t reveal the extent of plantings by those purely in the grape supply business. Of course, these are of less direct interest to wine drinkers.

Canberra’s mainly tiny vineyard plots and cellar door outlets are scattered across a vast landscape, stretching from Yass to Murrumbateman to Hall to Holt to Mount Majura, to top of the Lake George Escarpment and down to its western foreshore,

These vineyards lie in a variety of soils and aspects and — probably more importantly in terms of wine style — cover a variety of altitudes from a little over five hundred metres on the Murrumbidgee Valley side of Hall, through the mid six hundred metres at Murrumbateman, to the low seven hundreds along Lake George and into the eight hundreds at the top of the escarpment near Wamboin and Lark Hill winery.

As the area under vines and the number of vignerons expanded over the last decade, so too did the district’s winemaking capital – in both physical and human terms. The new talent and new equipment, added to the previous quarter century’s learning, saw a marked increase in the number and quality of our very best wines, if not the elimination of all winemaking problems.

The decade also saw shiraz and, to a lesser extent, riesling step forward as our regional stars; the emergence of viognier as another outstanding performer; and promising debut’s from pinot gris, marsanne, sangiovese and tempranillo.

Chardonnay’s performance remained solid, if upstaged by those from nearby Tumbarumba; pinot noir hit several highs at Lark Hill and remains a contender in our higher, cooler sites; sauvignon blanc can be delicious as at Brindabella Hills; cabernet sauvignon has proven challenging; and merlot struggles for identity.

Importantly, the decade welcomed the arrival of several sophisticated, modern cellar door facilities, notably those of Kamberra, Lambert’s, Madew, Lerida Estate and Shaw Vineyard Estate – as well as food offerings at Pialligo Estate, Poachers Pantry and Yass Valley Wines.

Helm Classic Dry Riesling 2006 $25 & Premium Riesling 2006 $39
Ken Helm’s been out of the blocks quickly with his 2006 rieslings having hit a gold-medal score for the Premium Riesling at the recent Winewise Small Vignerons Awards and winning bronze medals for both in the 2006 Melbourne Show – where the cheaper Classic Dry outscored the Premium. This is not unusual as the softer, slightly sweeter Classic Dry has strong drink-now appeal where the more austere, slow-evolving Premium blossoms with a few years’ bottle age. Unquestionably to me the Premium is the better wine in the long run. Both are to be released on September first at cellar door, phone 6227 0555.

Gallagher Canberra District Riesling 2006 $17
In a tasting of eight local 2006 rieslings Gallagher and Helm Premium drew my top scores with the victory finally going to Gallagher by a tiny margin. This is a lovely, fresh, citrusy and delicate drop sourced from Graeme Lunney’s Four Winds Vineyard, Murrumbateman. The previous vintage, from the same vineyard, won gold at last year’s local show and this one seems to be of a similar quality, if a little more full flavoured. The pale, bright, colour, varietal purity and fine structure all suggest a long and interesting flavour evolution in bottle. Cellar door phone 6227 0555.

Copyright © Chris Shanahan 2006 & 2007

In 1997 when BRL Hardy Ltd (now Hardy Wine Company, a division of US-based Constellation Brands) announced ambitious plans for Canberra, the local industry, then twenty-six years old, produced about thirty thousand cases of wine annually from about 400 tonnes of grapes.

It was a time of great optimism for the Australian wine industry. Surging global demand for our wines, especially reds, had sparked a vine-planting spree that was to last until the end of the decade.

As supply struggled to keep pace with demand, grape growers and winemakers alike enjoyed unprecedented returns. In conjunction with generous depreciation provisions, this sparked further planting.

As result, the area under vine in Australia grew from 88,474 hectares in 1997 to 166,665 hectares in 2005. By 1997 annual plantings had grown to 8063 hectares (up from 1646 in 1991) before peaking at 16,048 hectares in 1999 and tapering off to 5,819 in 2004.

These new plantings fed export sales that grew from 172 million litres worth $687million dollars in the year to December 1997 to 726 million litres worth $2.8 billion in the year to May, 2006.

In the same period domestic sales of Australian wine increased from 346 to 430 million litres. In total, then, the decade saw sales of Australian wine increase from 518 million litres to 1.16 billion litres – with imports increasing by 310 per cent and domestic sales by just twenty four per cent.

Viewed against this massive increase, Canberra’s growth from around forty hectares (270 thousand litres of wine) in 1997 to perhaps five hundred hectares now (3.4 million litres) seems spectacular on a relative basis, if modest in an absolute sense.

But poking around amongst those mind-bending statistics, it’s apparent that not all of the development was driven by the export juggernaut nor was it all on a grand scale.

As broadacre developments (some of them ill-fated tax-driven schemes) proliferated, so, too, did the number of mostly small vignerons — growing from just under one thousand in 1997 to a little over two thousand now. This national doubling was mirrored in Canberra’s increase in winemaker numbers from perhaps twenty to the forty listed in the current Canberra District Wineries Guide.

A few more statistics illustrate the stark contrast between our larger makers and our smaller ones: in a national grape crush of 1.9 million tonnes, about seventy per cent of wine makers crush one hundred tonnes or less while just twenty one winemakers account for almost ninety per cent of branded wine sales.

On the export scene the contrast between big and small producers is particularly sharp with twenty producers accounting for eight-five per cent of sales and a little under fifty per cent of our winemakers not exporting at all.

The last figure suggests that perhaps the majority of small makers of the kind we have in Canberra focus entirely on a domestic market that grew just twenty-four per cent in a decade when winemaker numbers doubled and production skyrocketed.

If that sounds like a tough commercial environment consider, too, that all of this coincided with the intense retail consolidation now underway as Coles and Woolworths increase their market reach.

How Canberra’s small vignerons deal with this and to what extent our only winemaking giant – Hardy’s Kamberra Winery – show market leadership will be the topic for the next few weeks.

Copyright © Chris Shanahan 2006 & 2007

What’s the connection between Olivia Newton John and two buck Chuck?

Yes, there is one. And it’s in some blue coloured wine bottles sold through Woolworth’s BWS chain a few weeks back.

But before we discover the connection, let’s meet two buck Chuck.

A couple of years ago American retailer Trader Joe’s released the Charles Shaw varietal wine range at an unprecedented $1.99 a bottle. The wine was instantly dubbed two buck Chuck.
What rocked the global wine industry and won American consumers was two buck Chuck’s extraordinarily low price. How could this be?

Well, Trader Joe had very effectively tapped into a wine glut caused by a massive Californian vine-planting spree in the late nineties.

At the time Australia’s own wine glut – also driven by a late nineties planting spree – was looming before hitting with full force following the bumper 2005 harvest and only slightly smaller 2006 vintage.

Here the glut, in combination with an intense nation-wide retail rivalry, drove wine prices down as well as spawning a new generation of ‘clean skins’ – unbranded wine sold in minimally labelled or entirely bare bottles.

But, as low as retail prices fell, an Australian two buck Chuck seemed unlikely until a couple of weeks ago when separate branches of Woolworths achieved the seemingly impossible. And this is where Olivia Newton John comes in.

The word from Mildura is that two Woolworth’s buyers visiting the region earlier this year put two and two together and gave Australian wine drinkers two buck Chuck in blue bottles.

Initially, the story goes, the buyers enquired after grape growers abandoned pre-vintage by McGuigan Simeon Wines. At the same time they learned about a large cache of blue wine bottles sitting in a contract bottler’s warehouse.

These bottles had been bought in optimistic volumes for export to the USA under Olivia Newton John’s Koala Blue brand. By vintage 2006, however, they had become about as white as a white elephant can be – until the Woolies’ buyers came along.

By putting chardonnay from the abandoned growers (by my guestimate costing thirty cents a litre or less) into distressed-priced blue bottles (probably bringing the total packing cost to about half the normal level) they had on their hands Australia’s first two buck Chuck – if they wanted to.

And they did, selling the entire production — an estimated 136 thousand six packs — at $11.93 in just one week.

And what did this achieve? Well, Woolies got the triple whammy – a thumbs up from keen wine drinkers, a modest profit and a poke in the eye to arch-rivals Coles; consumers got a good deal and the abandoned growers and Olivia Newton John each received some rather than no money.

In the same week, Dan Murphy, another Woolworths’ chain, offered two wines – a cabernet merlot and a chardonnay – at just under the $2 mark. Again, I am told that this was a one-off phenomenon.

The question asked by a struggling industry and a delighted consumer is whether or not the Aussie two buck Chuck is dead and buried.

The answer is that, unquestionably, it cannot be sustained. However, until production comes back into line with consumption it’s quite possible that distress sales may cause a repeat.

By all accounts there’s a lake of bulk wine out there – especially chardonnay and cabernet sauvignon. And with prices as low, I’m told, as thirty cents a litre, there just has to be more cheap wine coming our way or flowing overseas.

Copyright © Chris Shanahan 2006 & 2007