Wine Exports Sparkle

Europe Business Review, Oct-Dec, 1999 by John Shaw

Australian wine exporters will mark the Millennium with record sales and with future supplies assured by a bumper 1999 grape harvest.

The Australian wine industry crushed 1.117 million tonnes of grapes in 1999 - the first time it has topped the million tonne mark.

The record harvest means Australian producers are now better able to meet the growing demand for wine in Europe and elsewhere.

The Australian Wine Federation says the 1999 harvest, up 20 percent on the previous year, represented an extra 139 million litres of wine, equivalent to two-thirds of total 1998-99 Australian wine export volumes.

The total intake for the vintage, last January to May, was due mainly to favourable conditions in most areas.

Chardonnay grapes posted an increase of 38 percent to 235,945 tonnes, with shiraz up 40 percent to 207,103 tonnes, and cabernet sauvignon up 36 percent to 133,363 tonnes.

The industry has invested heavily in recent years in vineyard planting for premium wine varieties, and seen exports grow in value from A$20 million in 1985-86 to A$1 billion this year.

The Millennium season is proving profitable for Australian wine exporters, especially shippers of sparkling varieties.

Fears of Champagne shortages at the party of the century are boosting advance overseas sales of various Australian varieties of bubbly.

Australian and other non-French makers of sparkling wines cannot call them "Champagne" because European laws protect the name of the famous product of that 4,800-hectare region in north-east France.

In France, the prices of the shares of major Champagne makers are rising as orders for December delivery pour in.

Marne and Laurent-Perrier, the second and fifth largest Champagne makers, recently made new equity issues.

Monopole went public last year and has since doubled its share price and tripled its earnings. Moet has increased sales 40 percent in the past three years as shrewd buyers stocked up for Y2K celebrations.

Overall, Champagne sales - carefully controlled by the French industry - are likely to increase ten percent to 330 million bottles in the year 2000, many of the extras emptied in the first few days.

Southcorp, Australia's biggest wine exporter, is estimating export increases of 25 percent for its sparkling wines this year, particularly Seaview Brut, its top bubbly seller overseas, and its Salinger Brut.

At the 1999 International Wine and Spirit Competition in the UK Southcorp's 1993 Seppelt Salinger Brut (photo right) was awarded the trophy for best bottled fermented sparkling wine.

The Australian victory reversed the trend for wines from the Champagne district of France to dominate the trophy for many years.

Seppelt's chief winemaker Ian McKenzie said: "Salinger has won recognition in prestigious company. It's a wine that has great appeal to the European market, and almost one third of our annual production is sold there."

A blend of chardonnay, pinot noir and pinot meunier - the Champagne district's traditional varieties - Salinger has long been considered one of Australia's finest "sparklers".

Grapes for this wine, which retails for around $23 a bottle in Australia, were chosen from four cool-climate vineyards.

Southcorp's chief North American executive Jose Fernandez reports Seaview sales there are already rising like champagne bubbles.

Fernandez, based in Monterey, California, the biggest US wine region, anticipates Seaview Brut sales of 30,000 cases in August-December this year, compared to its sales of 29,000 cases in the US in 12 months to June 1999.

Seaview sparkling sales took off in the US in mid-1998. In the previous 12 months sates had been a modest 9500 cases.

The Seaview sales drive in the US uses new, more colourful labels. In Canada, Seaview's sales of sparkling wines are also increasing rapidly.

Southcorp's UK manager Michael Paul reports from London: "Seaview is already seeing a surge in sales as British retailers begin to buy early for Millennium parties. We expect to see a sales increase over 25 percent this year."

The Seaview and Seppelt brands from Southcorp account for about 50 percent of Australian "bubbly" in the UK. Lindemans, another Southcorp brand, introduced a sparkling variety during the British summer, getting the name and taste known ahead of the Millennium's mid-winter celebrations.

A Lindemans "sparkler" - the Bin 25 label - was recently added to the range which Southcorp is offering to distributors in Asia for the Millennium season.

The company's regional office in Singapore, headed by Freddie Choong, expects "a healthy sales growth rate due to Millennium celebrations".

Southcorp's Vice-President (International), David Combe, says that 2000 will see both a test and an opportunity for Australian sparkling wine exports. "If the French don't sell as much champagne as they hope they will cut prices - but if they sell well there could be a shortage that Australia can help fill," he says.

Jacob's Creek, the Australian label famous in Britain for its best-selling red and white table wines, released its first sparkling wine in the UK nine months ago.