Poor quality Aussie exports predicted after wet harvest

A warning of low-priced and poor-quality Australian wine exports has been issued after 2011’s rain-soaked and high-volume harvest.

Speaking to the drinks business for this month’s lead interview, new CEO of Treasury Wine Estate’s, David Dearie, said he was concerned at the shipment of “extremely cheap” and “poor quality” Australian wines, mainly to the UK and Asia.

This year’s 1.62 million ton total harvest in Australia was higher than 2010’s 1.5m tons primarily due to wet conditions swelling yields.

Dearie spoke of the production and export of low-quality wines that could damage Australia’s image in international markets.

While he admitted that most of the rain-diluted and mould-damaged grapes will be used to make concentrate, he said: “We are also seeing wine produced that is not good quality”.

“We’ve been rejecting grapes because of mould but others are saying, ‘we’ll take these off your hands’ and these grapes should not be turned into wine,” he stated.

On the other hand, Dearie added that such a situation could favour Australia’s well-known wine labels. “This is when the power of brands comes in, because people know that the quality is there,” he said.

Turning to his own business, he told db that he was convinced of the potential in Treasury’s existing portfolio, suggesting that five-year targets – which he will set out later this month when the new company releases its annual results – will be met with the current stable of wines, which include names such as Beringer, Penfolds, Lindeman’s, Wolf Blass, Rosemount, and Wynns.

For more on Treasury Wine Estates and David Dearie, see the August edition of the drinks business.