Price promotions shelved as Australia changes wine tack

Now glut is over, country looks to "quality, image and sustainability"

Australian wine producers say regional quality products, not promotional deals, are the key to their long-term future.

Kevin McLintock, who chaired the industry taskforce which produced the Directions to 2025 strategy unveiled at the London wine fair, said the industry would be concentrating on increasing the value of Australian wine rather than volume.

He said the recent wine glut caused by over-planting had been a "challenge" for the industry.

"We have been pulled into certain price points in certain markets," he added.

The strategy for the next 18 years focuses on three areas : quality, image enhancement and sustainability, with the aim of increasing volume by 19 per cent and value by 25 per cent over the coming 20 years.

A marketing campaign which will put Australian wine into four categories - brand champions, generation next, regional heroes and landmark Australia - will be rolled out globally to target consumers.

Paul Henry, general manager of Wine Australia, said the campaign would convey an aspirational message.

He said: "What is going to keep us relevant to the consumer? It can't be price, it will not be deal, it must be quality."

Speaking to OLN, Henry added: "To hit £3.99 without any marketing support means you need to buy grapes at $200 a ton. That's unsustainable. We are not best placed to compete on price and that's exactly what we've been doing.

"I think that we will be faced with moving away from certain price points.

"We've got to work together with the UK consumer and tell them not to get a nosebleed above £3.99. I'm not saying that £3.99 is going to disappear for Australia , but that's not a position we're going to be advocating."

Retailers are talking to producers in South Africa, Chile, California and France about finding wines to use as promotional fodder.