German Chain Orders A Taste Of Mildura Wine
The Age
Monday December 6, 1999
Victorian wine will be introduced to the tastebuds of thousands of Germans next year, after a landmark deal was signed last month.
Cranswick Premium Wines will export 1.5 million bottles of chardonnay to a German supermarket chain in the next two months, fulfilling what the company says is the largest single order it has ever received.
The dry white is made at the Milburn Park winery in Mildura, and the majority of the grapes used in its production have been sourced from Victoria.
Cranswick is keeping quiet about the identity of the German buyer, to ensure the supermarket can achieve maximum impact when it launches the wine to its customers.
But the wine producer is happy to trumpet its achievement in general terms. ``This is a significant breakthrough for Cranswick," the company's managing director, Mr Graham Cranswick-Smith, said in announcing the deal in November. ``As mentioned in our results announcement in September, we have been targeting the German market, which is the world's largest wine importer. This order demonstrates the opportunity for Cranswick to penetrate new markets as Australian grape prices fall and we can meet key price points," he said.
The deal follows previous success in the European market - last year, the British supermarket giant, Tesco, placed an order for a million bottles of Cranswick's Barramundi brand, then believed to be the largest single order for Australian wine ever placed by a British retailer.
The Barramundi product, its label adorned with Ken Done artwork, is targeted specifically to the export market.
Both the Barramundi and the chardonnay products come from the south-eastern region of Australia, which accounts for 95 per cent of Australian wine production. ``The whole of south-east Australia is a fantastic place to grow grapes - the climate we have, the soil, the access to water, the viticulture standards are all superb," Mr Cranswick-Smith said.
Cranswick, Australia's sixth-largest wine exporter, produces about 1.2 million cases annually, and exports over two-thirds of these to 16 countries around the world. It has increased its overseas sales from 8000 cases in 1992 to a forecast 800,000 in 2000.
The company's achievements reflect the growing global demand for Australian product, which has fuelled a spirit of optimism in the Australian wine industry.
At a seminar on investment in the wine industry last month, Mr Bruce Kemp, the former head of Southcorp Wines and now chairman of the Internet wine concern Winepros, described the 1990s as ``a period of unprecedented growth in the Australian wine industry ... and a significant turning point in the development of the industry, particularly in an international context". Mr Kemp noted that Australian vineyard territory had grown from 59,000 hectares in 1990 to around 105,000 hectares this year, and that the grape tonnage produced had more than doubled in that time.
While the 23 per cent increase in domestic sales over that 10-year period is significant, it is dwarfed by the global achievements of Australian wine.
In the past decade, international sales had increased from 41 million litres in 1990 to 249 million litres (valued at $1.5 billion) today, Mr Kemp said - a rise of over 500 per cent. He said Australia now held about 10 per cent of the wine market in Britain. Other destinations for Australian wine include Ireland, Germany, Sweden and Japan.
Three things had been needed to generate that growth, Mr Kemp said: ``Cash, cash and cash." He estimated that between $3.2 and $3.6 billion dollars had been spent by the Australian wine industry to support its development.
Mr John Quirk, the managing director of the boutique Kyneton operation Vincorp Wineries, also addressed the Securities Institute seminar. Vincorp listed in February 1998 and is one of Australia's smallest listed wine companies, with a market capitalisation of about $13 million. Mr Quirk said the company was ``very export dependent", and noted that around 80 per cent of the company's revenue in the first four months of this financial year came from sales to Britain, the US, Japan and Canada.
Some difficulties during the last financial year - including the disastrous use in its Trio Station wine of a synthetic cork, which Vincorp claims couldn't be removed - resulted in a $2.9 million loss. Mr Quirk said the cork dispute was now the subject of litigation, several other problems had been overcome, and the company's future was ``looking brighter".
He said the company had optimistic objectives for the next few years.
``Why not, you've got to be, and these are good times to be in the wine industry. The demand is there, the dollar is down (which) is good for export, Australia is a good brand ... in the international markets," he said. ``It's time right now to make the best of it."
© 1999 The Age