The theme of today in Australia is change and adaptation. Separate from the challenges of an ongoing global pandemic, the disintegration of the nation's relationship with China has caused the wine industry much pain. Australian wine exports to mainland China dropped to nearly zero in December 2020 as the Chinese state continues to impose punitive tariffs on Australian goods.
Meanwhile, supermarket chain Woolworths is in the process of finalising the most significant business transaction in the domestic wine market for decades. The supermarket brand will separate itself from the Endeavour Group, the largest owner of retail alcohol stores in Australia. The demerger was first considered in July 2019, spearheaded by the company's board of directors. “It will create two leading ASX-listed companies,” Woolworths Group chairman Gordon Cairns told local press.
“We believe both businesses, post demerger, have strong future prospects and will benefit from greater simplicity, focus and ongoing partnership.” However, as a standalone entity, Endeavour's future in a post-Covid world is arguably less secure. It will also face increasing competition from the German brand Aldi, which now operates over 500 stores in the market. Unlike Woolworths, Aldi will continue to sell wine as part of its business model. As on-premise consumption becomes the mainstay of wine sales in Australia, competition for marketshare is fierce.
Adapting to changes
In that respect, Australia mirrors every other major economy struggling to adapt to a new normal. Alcohol sales to the hospitality sector declined significantly in 2020, due to Covid-19 restrictions and state-wide lockdowns. Yet retail sales rose dramatically, helping to offset the losses in on-premise consumption. According to industry insiders, the rosé category has shown meteoric growth in recent times, with both domestic and imported brands gaining market share.
Indeed, although Australia is one of the world's key wine producers, the market for imported labels is buoyant. Its closest neighbour exports a large volume of Marlborough Sauvignon Blanc to Australian consumers, while Champagne sales have rocketed over the past five years. “Champagne has a very discernible cachet with Australian consumers that domestic sparkling brands may lack,” says Peter Gago, chief winemaker at Penfolds. “I think it will continue to do very well.”
Australians are usually optimistic, although the pandemic has understandably dented their “can do” approach to life. Nevertheless, stakeholders like Gago are confident that their domestic industry will develop new markets and look beyond the ongoing dispute with China.
According to Wine Australia, wine exports to the UK have been rising since April 2020 – total sales of Australian wine in the UK retail sector increased by thirteen percent in value and nine percent in volume, respectively. The US market also showed positive growth in value in 2020. “In the year ended December 2020, exports of Australian wine to the US climbed by four percent in value to $434 million,” Wine Australia reported.
Of course, no one is under any illusion that the next twelve months will be easy. The hospitality industry may never recover from a period of successive lockdowns. But Australia is ready for the challenge.
Chris Ryan / Credit: Jo Mcgann
Notable Sommelier: Chris Ryan
Winner of the Best Sommelier of Australia 2021 award, Chris Ryan is a dangerously talented individual. Approachable and modest, Ryan has worked for the Cumulus restaurant group for several years as its head wine buyer. After completing a degree in business and economics, Ryan started working in Melbourne hotels. Although Covid-19 has temporarily curtailed his profession, Ryan continues to hone his skills. In the sommelier and buyer's own words: “I love the spirit of generosity in my profession. The wine profession shares a spirit of generosity that hopefully makes its way to the guest.” It is people like Ryan, with his awesome energy, passion and drive, that continue to bring international acclaim to Australia's food and wine scene.
Notable Wine Bar/Restaurant: The European, Melbourne
It was Melbourne's The European that broke new ground in urban Australia, bringing together the best of local food and wine. The list reflects the ethos of its owners and showcases fine vintages from across the globe, but with an understandable bias towards Australia's wine regions. It is an essential part of any visiting oenophile’s itinerary.
In terms of the competition, Bellota is an excellent example of the hybrid approach. Part wine bar, part restaurant/retail shop, the venue has a generous selection of wines by the glass from all corners of the world. Customers are at liberty to drink wines from Bellota's retail selection in the restaurant, for a modest corkage fee.
The dining room at Royal Mail Hotel / Credit: Emily Weaving
Notable Restaurant Wine List: Royal Mail Hotel, Dunkeld, Victoria
Darling of both Australian oenophiles and visiting gastronomes, the Royal Mail Hotel in Victoria has the finest wine list in Australia today. Founded by a renowned lawyer, the food and service are exceptional. Yet it is arguably the wine list rather than simply the cuisine that has earned the hotel the most attention. The cellar contains over 25,000 bottles, including the largest private collection of Bordeaux and Burgundy in the Southern Hemisphere. It is a place that tests a wine writer’s ability to control their superlatives – where else in Australia could you hope to encounter Montrachet de la Romanée Conti, several vintages of Petrus, or verticals of Chateau Lafite? Old vintages of Australian classics like the Grange are also abundant. To find such a diverse list in a country that was traditionally highly suspicious of imported wines is nothing short of remarkable, even at such a high-class address.
Major Regional Promotional Body: Wine Australia
The industry's national promotional body has taken great efforts to increase the profile of Australian wine in the export arena over the past decade, acutely aware that global competition is ever-increasing. The results speak for themselves: impressive growth in key markets like the US and Germany. But the organisation is facing its greatest challenge: helping to manage the fallout from the Australia/China trade war. Industry insiders are predicting that the dispute could continue for several years before a resolution is found. And there will be another big change: After 15 years, including 8 years as CEO, Andreas Clark will be leaving Wine Australia in late 2021.
Notable Retailer: Endeavour Group
Currently undergoing a demerger from supermarket chain Woolworths, the Endeavour Group is the most important drinks retailer in Australia. Operating both online and through physical channels, the company owns over 1,600 retail outlets, with a particularly strong presence in the state of Queensland. Its most famous brands are retail shops Dan Murphy’s and BWS. It also controls 332 hotels and Langtons, Australia's largest auction house and private client supplier. Both Dan Murphy's and BWS are in every key urban centre in Australia, offering an impressive range of both domestic and international wines – in terms of a large choice under one roof, BWS has no equal. Online sales have soared in recent times, as you would expect.
Notable Specialist Wine Retailer: East End Cellars, Adelaide
Just as Melbourne's Bellota successfully exploited the hybrid business model, so East End Cellars has led the way in Adelaide's burgeoning wine scene. A profitable combination of importer, specialist retailer and restaurant, East End Cellars has one of the largest ranges of imported wines in South Australia. It covers every base, from natural wine to Champagne Grandes Marques. The service concept is also astutely designed: numerous helpful and approachable staff enthusiastically talk customers through the many nuances of wine regions, wine tastings are a constant feature, and the whole atmosphere is charged with a need to engage rather than simply to sell.
Notable Distributor/Importer: Negociants
Negociants is owned by wine producer Yalumba, a sizeable operation in the Barossa Valley wine region. For a long time now, Negociants has been the most important stand-alone importer of wine brands in Australia, including Champagne labels, Tuscan producer Ornellaia and top-end Burgundy. With a formidable client base in the on-trade and a reputation for dynamism and hard work, Negociants should be the first port of call for a producer looking to get to grips with the diverse Australian market.
Notable Wine Publication and Website: Halliday Wine Companion and Magazine
Leading critic James Halliday is undoubtedly Australia's most respected and widely known wine expert. In addition to his website Halliday Wine Companion, he publishes a print magazine six times a year. Adopting the standard 100-point wine scoring system, Halliday offers the most comprehensive guide to domestic wines, benefiting from his 45+ years of experience as a professional journalist and wine writer.
Most Influential Opinion Maker: Max Allen and Tyson Stelzer
The last category of key opinion maker is undoubtedly the most difficult and contentious entry into this list. For a start, Australian consumers do not slavishly follow scores as much as collectors in the US; no Australian wine communicator could ever hope to rival Jancis Robinson MW or The Wine Advocate's influence.
However, a small firmament of writers exerts some influence, including the aforementioned James Halliday, critic Tim White and freelance writer Mike Bennie. But the two individuals with the most clout are surely Max Allen, who writes for the Australian Financial Review, and Tyson Stelzer. Allen has an impressive biography: an honorary fellow in history at the University of Melbourne, Allen has been writing about wine for almost 30 years. He is the wine and drinks columnist for the Australian Financial Review, longtime contributor to Gourmet Traveller magazine and Australian correspondent for JancisRobinson.com. Meanwhile, Tyson Stelzer is Australia's foremost Champagne expert. Heavily involved with James Halliday's Wine Companion, Stelzer is a highly respected author, judge, writer and commentator.