A Smidge More Doom & Gloom

September 11, 2020

This week I will be reporting on the significant drop of bulk wine exports from Spain and some insight into the China investigation of Australia wine imports.

BULK WINE: According to the Bulk Wine Club run by the World Bulk Wine Exhibition, (to be held in Amsterdam, November 23-24, 2020) big-time bulk wine shipper, Spain, has seen it exports of bulk wine plummet during the early stages of Covid-19 (April, May) – with reductions of 22% and 28% respectively, amounting to 52 million litres of wine.

One of the causes was the 97% drop in shipments to Russia, a combination of the effect, of the virus and of new legislation in Russia, to handicap and hinder non-Russian wine producers. Russia has previously embargoed wines from former Soviet Bloc countries like Georgia and Ukraine on more than one occasion when it was displeased with those countries (Hmmm! Sound a bit familiar to our current situation?).

Added to this political pain, bulk sales to China dropped 92% in May and sales to Canada fell by around 65% in both April and May. Whilst the report does not mention it, I would suggest that the number of wine tankers crossing over the border from Spain to France has probably decreased somewhat given the massive surplus of wine in France, where the government is looking to buy wine cheaply from producers and distil it into neutral alcohol.

This Spanish “doom & gloom” was partially offset by increases in shipments to Denmark, Japan, Germany and the UK.

CHINA INVESTIGATION: By now mountains of info has been written about this subject so I will refrain from commenting on the iniquity of the whole thing, but rather mention some of the factors cited in the claim by CADA (China Alcoholic Drinks Association, which includes in its membership most, if not all the mega wineries in China – Changyu, Great Wall and Dynasty), which have seen their sales volume slide by nearly 50% in the period in question – 2015-2019. In that time frame China’s wine production went from 1.15 billion litres per annum (2015) down to a mere 451 million in 2019.

Their claim lists over 40 programs which they believe give Australian wine producers an unfair advantage over the locals i.e. an uneven playing field. This list contains some fairly bizarre items including the WET rebate (which has no export application), the $50 million Wine Australia fund from the government, and includes just about every program for the wine industry that is run in the country. Some examples are: ‘The Research and Development Tax Incentive”, the “International Wine Tourism State Grants”, “Vineyard and Orchard Expansion Programs”, and other programs covering everything from irrigation, drought and bushfire recovery funds and State Cellar Door development grants.

They argue that the wines from Australia and China are “similar products” in varieties, styles and tastes. They further claim that the varieties used to make the wine are from similar origins i.e. Europe. Interestingly in China they make almost all of their wine from the “noble” French varieties, with Marselan being the only major exception – probably no more than 15-20 different varieties in total. Whereas at vintage 2020, Australia produced wine from 154 different varieties and its most renowned variety, Shiraz, is almost not grown in China – Yeah, really similar!!

So what this is, in effect is the Chinese equivalent of the old Trade Union “Opening Gambit” at the negotiations, when they chuck in everything including the kitchen sink.

IF the enquiry is run fairly and openly, Australia has little to fear, except probably the re-introduction of the import duty that was removed via the FTA (Free Trade Agreement), as most of the claims are spurious and a “fishing expedition”. However, bearing in mind how the Chinese Government often works, it could become a significant blow to the Australian wine industry.

The more cynical amongst us would say that it is rather interesting to note that many of the companies in CADA have significant French connections and this whole ruckus only started AFTER Australia surpassed France as the leading wine being imported to China.

Isn’t it interesting that there is no such claim against French wine when the French government is introducing significant subsidies for their wine industry and China and the EU are currently negotiating an FTA – A mere coincidence, OR NOT?

Well time will tell how this sad story pans out, but as I have been saying for quite some time now – find other export markets for your wines.

Cheers and keep on drinking great Aussie wines!!!

This Week's Wine Review:

I have always had a soft spot for Grenache, ever since I first tasted a d’Arenberg Grenache back at the start of the 1990s. However of late I have been at odds with many McLaren Vale and Barossa Grenache producers who have moved away from the traditional big, rich, ripe style of Grenache towards what they call, “the more elegant, lower alcohol” style, which in most cases I call, “the thin, green, pissy” style.

Over the last two years (or so) I have tasted a number of 12.5%-13.5% Alc/vol Grenache that are thin, weedy and totally underwhelming.

I drink wine for its flavour, irrespective of the alcohol level in the wine. Hey, if a wine is higher in alcohol say 15% or even 16% it might mean that one can drink 0.278349 glasses less of it before going over the limit. Well so fricking what! I don’t drink and drive in any case. If you want to drink lighter, more elegant styles of wine, try Pinot Noir, Blaufränkisch, Gamay, Zweigelt or a raft of other varieties that deliver their flavours at lower levels of alcohol. In my opinion Grenache needs to be well and truly ripe (ergo higher alcohol) for its alluring, full, rich flavours to come out. Yes, I have tried a few (very few) Grenache at around 13.5% alcohol that deliver the variety’s true flavours, albeit in a leaner style, but most of the lower alcohol (less ripe) ones are thin, green, weedy and a waste of space. At one Grenache tasting event, I tried a “raspberry cordial” Grenache and when I asked the winemaker what the alcohol level was, he said: “12.5% - If you want more alcohol drink Vodka!” NO matey! If you want to make light, elegant wines, use another variety!!!

So off the soap box and onto this week’s wine – the GRANCARI ESTATE 2019 ORGANIC OLD VINE GRENACHE. Wow, what a beauty! Handpicked and made with all of Rino Ozzella’s TLC, this wine is redolent with bright aromas of plums, red berries and strawberries with a hint of freshly baked pastries and just a drop of counterbalancing lime on the alluring bouquet. The palate oozes rich, round, divine flavours that coat the mouth and please the tastebuds. It is super-smooth and has a delightful lingering finish.

This wine is a class act which whilst fabulous now, will scale greater heights in 2-3-years-time, if one can muster the patience to hang on to it.

A truly great Grenache! Oh yes, and as it was made from fully ripe fruit the alcohol level sits at 15.0% - big deal!!

Cheers and enjoy great, properly ripened Grenache from wherever it comes from, be it Spain (Garnacha), France or preferably Australia, especially from South Australia!

Winery Link: www.grancariwines.com.au