Australia teaches Old World how to sell wine

The Australian Wine and Brandy Corporation (AWBC) said it would spend A$9.5m (€5.6m) on a new international promotion campaign entitled "open your mind to Australian wine"​.

Sam Tolley, AWBC chief executive, said the move was a proactive response to a variety of emerging challenges facing Australia's wine industry.

"These include increasing global competition from other wine producing countries, an oversupply of some grape varieties (particularly red) and global rationalisation of producers, distribution channels and retailers resulting in heavy price discounting,"​ he said.

Australia produced more wine in 2005 than ever before, rising two per cent on the year before to 1.96m tonnes.

The Hardy wine firm, owned by US Constellation Brands, last week said it had increased production by 10 per cent in 2005 to a record 365,550 tonnes, thanks to mild weather conditions in Australia's major grape growing regions.

Tolley said Australia now wanted to tackle the industry's challenges by building on its "formidable reputation"​ in foreign markets.

"We now want to encourage overseas wine consumers to explore the full diversity of Australian wine - whether it's a varietal style such as Shiraz, Pinot Noir or Viognier, or a wine from one of Australia's 60-plus wine regions,"​ he said.

Australian wine exports were valued at $2.75bn in 2004 and are still rising after an explosive decade, according to Jonathan Scott, general manager of the Australian Wine Export Council - AWBC's marketing division.

Australia's promotion push puts even more pressure on Old World producers, including France, Spain and Greece, who have struggled to increase sales alongside a rise in production over the last year; forcing them to plea for EU crisis funding to distil excess wine into industrial alcohol.

Many French wine makers have felt the squeeze between surplus production and dwindling foreign markets more acutely over the last few months - seeing market prices fall between 30 and 50 per cent in some cases.

Yet, marketing investment took a fairly low priority in a recent industry aid package offered by the French government, constituting €7m of the €140m promised.

And, while this sum exceeds that of the AWBC campaign, France has the unenviable task of distributing this in a more fragmented industry that also contains around 112,500 commercial producers compared to Australia's 1,800.

The AWBC also said its new promotional campaign was based on extensive market research within the Australian industry. The French government, however, has only just undertaken to compile a detailed database of vineyards producing quality wines across the country.

Australia recently overtook France as the largest wine supplier to the UK, despite producing only a third as much wine as its gallic counterpart and being situated about as far from Britain as you can get.

Britain and the US account for around 80 per cent of all Australian wine exports, although markets are developing in Canada, Scandinavia and mainland Europe.

The New World giant, now the fourth biggest wine exporter behind France, Spain and Italy, will launch its new marketing campaign internationally on 17 May at London's International Wine and Spirits Fair.