by Martin Field

The good, the greedy, and the glut-tonous
Over a glass of good red we were talking a couple of weeks back about the Australian wine glut. Who in the wine industry wasn’t? The particular topic was news that wine industry lobbyists wanted taxpayers to fund a lazy $60 million bail out fund.

My drinking companion, a vigneron who has a small Victorian vineyard, makes his own wine and also sells grapes to big makers, was amazed. ‘Audacious!’ he said. ‘More bleeding snouts trying to get into the trough,’ I added. The government, in a rare stroke of wisdom, knocked back the bail out proposal, pointing out that nobody forced growers to plant their grapes in the first place.

Of course you have to feel sorry for growers forced to let their grapes rot after the suits at the big end of winetown tear up their contracts. And my winemaking friend told me that a well-known company he’d supplied did just that, wanting to take only part of a contracted vintage. He told them to stuff their deals up their de-stemmers and, luckily, found another, honourable, buyer.

The wine business is just a business, but unlike many others it’s seen as glamorous. That’s part of the problem. In the boom cycle it’s a magnet for cashed or borrowed up investors who see an industry offering an attractive lifestyle and a profitable business. Unfortunately they are often poorly advised and know little about winemaking.

And when the big profits do roll in these types swan around in luxury cars, get their buffed heads on TV infotainment shows and generally live the life of egotistical b-grade celebs. But you’ll never hear the wine high rollers say, ‘Thank you consumers for buying shiploads of our temporarily overpriced bottles. Here, take a few million bucks we’ve creamed off the top. Use it wisely to build new schools and hospitals for those less well off than us.’

In the inevitable bust cycle however, they immediately plunge into whinge mode and expect taxpayers to subsidise their losses, which often result from greed, bad planning, and even worse management.

The disastrous wine glut has been on the horizon for years, not least of all because companies, whose only business plan seemed to be chasing the easy dollar, planted grapes or encouraged contractors to plant grapes like there was no tomorrow. And given that situation you didn’t need to be an MBA, a clairvoyant, an economist or an industry analyst to know that the shiraz was going to hit the fan sooner or later.

Nearly six years ago, in September 2000, I wrote in a wine column, ‘My belief is that over the next few years we will see a glut of wine grapes with a consequent stabilisation, if not a fall, in wine prices. This can’t be good for winemakers but will undoubtedly please consumers. As for investing in a small vineyard to fund my retirement, I’d rather take up yachting. The latter pursuit has been likened to standing on one leg under a cold shower while tearing up $100 bills. It sounds like a far better investment than planting vines.’