Australian wine ripe for change

Australia must accept lower volumes in the UK and develop 'points of difference' for its wines, says leading industry figure Paul Henry.

The Australian wine industry must wake up to the fact that it is "no longer best placed to compete on price or volume alone", according to Paul Henry of Wine Australia.

Speaking at a seminar at last week's annual tasting, Henry, general manager for market development at the generic body, added: " If there's a single corrective slap in the face that needs to be administered to the industry, it's that".

The shift in approach was one of three key changes Henry identified as vital for Australia's continued success in the UK market. Producers and suppliers would also have to accept a drop in volumes in order to maintain value share.

The forecast for the 2008 vintage is around 1.44 million tonnes - up 30 per cent from previous predictions. "Although, talking to 20 of the top winegrowers in Australia, I'm optimistic that it could be 1.48 or 1.5 million tonnes," Henry said. The yield is an improvement on last year, but down by almost half a million tonnes on 2006, due to weather conditions.

Own-label wines at the lower end of the market are most likely to be affected by the relative shortage of wine. "Own-labels at £2.99 are a thing of the past," he said.

Henry also warned that to maintain continued success, Australia must seek to develop points of difference, such as embracing regionality, as well as pushing UK price points up above £3.99.

He said: "From a marketing point of view, Australia will now discover whether it's built a true brand franchise or just a value proposition that can be substituted by another country from the New World."

It acknowledged mistakes including "recognition that driving sales is not the same as building brands" Henry said.

He added: "To paraphrase Mark Twain, 'news of our demise has been greatly exaggerated'."