WineSleuth 4: Oz exports ↓: bulk wine ↑

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Exports of Australian wine slumped by seven per cent in the year to March, the latest figures reveal.

Although average value for both bottled and bulk wine exports rose, the increase in the export of bulk wine saw the overall average fall by one per cent to $2.65 per litre.

(What does this all mean to the average wine drinker in Shanghai? I’ll get to that later. TWS)

what’s up with bruce?

Wine Australia said the export fall was driven by several factors, including a decline in bottled wine sent abroad and a rise in bulk wine exports combined with a strong Australian dollar.

The strength of the Australian currency made native wine more expensive against European and South American wines. This also led to winemakers shipping their product abroad in bulk and completing the bottling process in the country of destination.

Wine Australia said in its report:

“The number of Australian exporters choosing to send wine in bulk to then bottle in-market rather than in Australia has increased significantly over the past few years.

The reasons for this include economic, environmental and scale rationale together with meeting the requirements of some customers.

“The on-going strong Australian dollar and the growing presence of buyers-own brands, particularly in the UK, are two key drivers.”

Australian red wine exports declined by 6 per cent to 433 million litres, white wine exports declined by 8 per cent to 256 million litres and sparkling wine exports declined by 10 per cent to 13 million litres.

The United Kingdom took 36 per cent of Australian exports but was down three per cent by volume. Demand in the UK for cheaper bottled supermarket wine is thought to be a factor in the switch to ship in bulk for bottling abroad.

The USA was down five per cent, Canada 12 per cent and China 22 per cent. Exports to Germany rose five per cent.

…courtesy of Chin Chin jobs, a drinks industry website.

Snob Alert: For bulk wine read bad wine. Potentially all very well in the largely developed and regulated markets of Western Europe and North America. But bulk wine in China is to be avoided at all costs (in my sincere opinion). It’s not such a problem when the product is already bottled under the supervision of the primary producer. Bulk wine represents the dumping of a largely unsaleable (over-produced) product, whose multitudinous supply middlemen have had fleeting responsibility for it? No provenance. No supply chain responsibilities.

I have wine I can’t sell. I have a ship-fill it with your wine. Where shall we send it? Who will want to buy it? Who will bottle it? Who will distribute it? Who is monitoring these transactions and the handling? Who cares? We sold it on.

Reminds me of the house of cards that created the banking fiasco. This is bottom feeder activity. I will have nothing to do with it.

And the next time? Who can undercut the price. Who will hold the duty of care? The pumping technician? The swilling engineer? The financiers?

A guy I know in Sanya claims he wants to buy this China bottled, bulk-imported Australian stuff out of Hong Kong because,

“Lord knows, we drink a lot of wine. OK, sometimes the Shiraz is sparkling when it’s not meant to be…but it so cheap that you can forgive the odd bottle.”

How alarm bells are not ringing is beyond me. This is China!

Lord help anyone who has this casual attitude to things they put into their bodies. Bulk wine is cheap for 2 main reasons. It weighs less and no formalised responsibility pathway exists. That Shiraz was fizzy because it was being held or put into equipment (probably the bottles) that at some point was open to the elements, wind-borne yeasts got in and created a secondary fermentation in the bottle (most likely) or (worse) other unknown and unrecognised contaminants were present. This is not new in China. ‘Bob’ should know better. He’s been here a long time.

This isn’t being alarmist; it’s being preventative. Contaminated foodstuffs writ large in flashing neon signs would not do the trick with ‘Bob’ because he, like many folks who drink for the quantitative effect (i.e. not the qualitative effect) thinks it won’t happen to him, and he’s ‘better off’ and winning because he had a lower price for more product.

If it sounds too good to be true, Bob, it probably is.

Soap box away, Wine Sleuth.

This is right at the nub of why I only deal with respected, western run businesses. They have proven logistics capability, known provenance and western standards of responsibility and accountability. I think that matters. All our wines are estate bottled in their country of origin by the folks who crafted them. I think that matters too. Why?

Whether a big multinational wine business or a small boutique producer is involved, stringent quality control systems and rules are in place which are monitored and enforced to ensure that customers are the final recipients of a quality controlled product. The system works well. Year on year wine prices for the industry as a whole have been falling (Bordeaux and Burgundy excepted). Buy smart. Not cheap. That’s all.

The Wine Sleuth

May 5th 2012

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