Chief executive of Tahbilk wines Alister Purbrick said drinkers should not expect prices to collapse entirely – a $20 bottle into $10, for example, was not going to happen – but he believed “Australian consumers are going to have a very good time of it over the next couple years”.
Winemakers are now confronting the perilous question of shifting price points – a significant indicator of quality in the minds of consumers – while maintaining viable margins and upholding the strength of their brands.
“We’ll choose our channels carefully … to ensure that we don’t, if at all possible, damage the brand as part of the process,” Mr Purbrick said.
“We’ve been doing this for a long time now and it’s possible to do it. But for some less experienced winemakers who are maybe making their first foray into this area they’ve got to be careful they don’t fall into that trap.”
Cheaper wines could emerge in the form of new or re-engineered brands, he said.
Victoria’s 2020 vintage was well down because of unfavourable weather conditions late last year. Next year could be closer to average, winemakers said.
It is their hope that growth markets, particularly in south-east Asia, will take up some of the medium-term slack, but any significant victories are unlikely until a COVID-19 vaccine becomes readily available around the world.
“A lot of the places we sell to in south-east Asia are tourist-dependent and the tourist market is obviously down,” chief executive of Victoria’s Rathbone Wine Group, Darren Rathbone, said.
“But on the flipside, in the United States people are buying online quite a lot because they’re stuck at home and not going out. There are ups and downs in all kinds of directions and you’ve got to work hard to capitalise where you can.”
China has accused Australia of “dumping” wine on its shores below cost. Producers have rejected the claims and note they come as diplomatic relations between the nations sink to new lows.
Mr Purbrick said there was much to play out, but warned it could be years before the Chinese market again became viable for mass exports of wine.
Victorian winemakers are generally not as exposed to the Chinese market as those elsewhere in Australia. Tahbilk (about 25 per cent to China) and Rathbones (about 20 per cent) are geared toward China more than many of their Victorian peers.
“The biggest concern I have is for the whole industry,” Mr Purbrick said. “There are a number of [mostly interstate] winemakers I know of … who are overly indexed in China at about 40-50 per cent and they might not have the flexibility we’ve got in reallocating that wine to other markets.”
Wine Victoria chair Angie Bradbury said it was too early to know the full ramifications of the Chinese decisions but she predicted there would be “great opportunities” for wine lovers.
The industry body is now working with the Andrews government on a campaign, planned to roll out this summer, to promote Victorian wines.
One of the key features of the campaign will be a new website in which consumers can type in flavour, region and prices preferences and get a list of Victorian options.
“There is a lot more Australian wine that is going to stay on our shores. We need all Victorians and Melburnians out buying wines from Victorian producers,” she said.
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Zach is a reporter at The Age. Got a story? Email me at email@example.com