McGuigan pushes for new duty band

9th May, 2013 by Gabriel Stone

Neil McGuigan, CEO of Australian Vintage, has called on the UK government to encourage responsible drinking with the creation of an alcohol tax band between 9% and 12% abv.

Neil McGuigan

Neil McGuigan

Highlighting the absence of any difference in alcohol duty between 5.5% abv and 15% abv, McGuigan argued that a shift towards lower alcohol wine consumption would be encouraged by the introduction of an intermediate band without posing such a challenge to quality.

Against the backdrop of recent 5.5% abv wine launches such as Blossom Hill Vie, Gallo Summer White and his company’s own offering Vinni, McGuigan noted: “A lot of people have jumped on the opportunity and gone into the laboratory.”

However, he maintained: “If you take it from 13.5% to 5.5% you’ll rip the guts out of the wine,” suggesting instead: “Have a tax break between 9% and 12% – we can make lovely wine there.”

In an effort to build support for such a move, not just in the UK market, McGuigan is currently holding discussions with industry bodies including the Wine & Spirit Trade Association and the Winemakers’ Federation of Australia. “We’ve got to show leadership here; prohibition doesn’t work,” he remarked.

McGuigan’s comments came as he unveiled a plan to introduce a small volume of back vintages of McGuigan Bin 9000 Hunter Valley Semillon, a variety that is often capable of producing high quality wine at relatively modest alcohol levels.

Having started to set aside “1,000 to 2,000 dozen” bottles in 1999, McGuigan now plans to release this mature stock at around 5-10 years old “when it starts to look at its peak.”

In addition to its wider launch plans for 2013, the company is also planning to introduce a Shiraz and Riesling to this mature release collection.

McGuigan highlighted Semillon as a variety that tends to mature in distinct stages, which can present challenges for the consumer. “In the first year you have lovely lifted lime juice character – you don’t want lemons, that’s tart acid,” McGuigan explained.

“Then it falls into a bit of a hole for one or two years, loses that lifted aromatic style and becomes quite doughy,” he continued, adding: “Then it comes out of that and starts to have this lovely hay character.”

Of the limited supply available, which is expected to retail through independent merchants and “a couple of clubs” for around £25 per bottle, Julian Dyer, Australian Vintage general manager for the UK & Europe, said he was “realistically looking at a couple of hundred cases” for the UK market.

By contrast, he pointed to the company’s efforts to promote Semillon on a more mainstream scale through The Semillon Blanc, which launched in 2010 and now sells “50,000 to 60,000 cases” each year.

The company also produces a sparkling Semillon style, for which McGuigan revealed a desire to reduce the current 11% abv by picking earlier. “We can do better by lowering the alcohol to 9% abv,” he maintained, pointing to a result that would be “fresher, zippier and could take on Prosecco.”

Despite the small volumes of mature Semillon available, Dyer stressed its importance both for Australian Vintage and Australian wine as a whole. “If you’re not talking about the top you lose credibility,” he observed.

Likewise, McGuigan remarked: “It’s tough making money in the UK; we’ve got to continue to push the quality of Australian wine, bring them small parcels and show what we can do.”

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