Tahbilk ‘not dropping pants’ for sales

14th October, 2013 by Lucy Shaw

Australian fine wine producer Tahbilk is adamant not to get drawn into the discount culture emerging both in the US and at home for Australian wines.

Matt Herde presents a Tahbilk library tasting at 28-50 Maddox Street

Matt Herde presents a Tahbilk library tasting at 28-50 Maddox Street

Speaking to the drinks business at a library tasting of the Tahbilk range oragnised by its UK importer, Armit, export sales manager Matt Herde said:

“You’ve got to be in the market, but I don’t want to be discounting for the sake of it – I’m not dropping my pants to get sales.

“We have to discount in order to remain competitive against the other brands, but it’s not a race to the bottom. The bigger wine companies can do that but it’s not where our future is.”

The Tahbilk winery in Victoria

Herde told db that Australia’s big two supermarkets – Coles and Woolworths – have been discounting Tahbilk’s entry level Shiraz, Cabernet and Marsanne, while the recent arrival of Aldi in Australia is further driving the discount culture.

“You can only take a hit on margins for a couple of years – a lot of wine companies are pulling out of export markets because it’s not profitable for them to be there and they could no longer swallow the margins.

“There’s consequently more competition for sales back home in Australia now and a lot of discounting going on, which is bad for the industry,” he added.

Despite the pressure to discount, both at home and in the US, Herde believes the Australian wine industry has turned a corner.

Tahbilk's new wine brand, The Tower, aimed at young female consumers

Tahbilk’s new wine brand, The Tower, aimed at young female consumers

“Australian wine bottomed out last year, but we’re moving into the next phase and are starting to see a resurgence.

“The category got bashed about due to overproduction and the peddling of the cheap and cheerful message – the strength of the Australian dollar against the US dollar recently hasn’t helped either,” he said.

“US consumers are confused about what Australian wine is, as you have Yellow Tail at one end and Penfolds Grange at the other. I think AU$20-40 is our sweet spot,” he added.

As with many fine wine producers, Tahbilk is focusing increasing amounts of attention on the Asian market.

“Asia is a small but very important market for us. We’re finding they are either going for our entry-level or our top wines, they’re not interested in the middle ground,” Herde told db.

“A lot of Australian wineries are going full speed ahead into China, and there are going to be casualties as a result as it’s an immature market,” he warned.

Herde has also noted a recent surge in interest for Champagne in Australia.

“The Champagne market is booming here – the Champenois are working really hard to collectively promote brand Champagne in Australia.

“People are trading up from local fizz as for ten dollars more you can get a bottle of Champagne – people are keen on the prestige element,” he said.

“The bulk of Champagne sales are coming through the on-trade in Sydney and Melbourne at the moment,” he added.

Tahbilk has recently released a traditional method sparkling Marsanne in Australia, which it hopes will soon be taken on in the UK by Armit.

It has also recently released a new brand called The Tower aimed at consumers aged between 20 and 40-years-old, with a particular focus on women.

Choosing Sweden for its launch, The Tower flags up Tahbilk’s green credentials, as the company became carbon neutral last year. With a simple label design, the wines are fruit forward in style and are made to be drunk young.

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