As in all wine-producing countries, there are numerous wine brokers in Australia. Their commodity is bulk wine. These are professional businesses, run by seasoned experts, quite properly operating within the law.
A great deal of the Australian wine business, in both the domestic and international markets, depends upon such skilled merchants.
These businesses move excess wine, made, say, by wineries with more vineyard than they generally need for their home brand.
A good example is when an estate changes hands, and the new owner chooses to sell off wine made from grapes it intends to uproot and perhaps replace, as the fruit doesn’t fit its desired product range. Rather than shop around to find another winery which will take this off their hands, many wineries find it easier to make the wine and sell it through an expert intermediate broker.
In times of general industry over-supply of grapes, as Australia has endured for too many years, many struggling growers depend upon these brokers for their basic income. One way or another, they find a winery to process their fruit to make bulk wine, in which case the broker finds a retailer or wholesaler, somewhere on earth, to buy the product.
These merchants also market vast amounts of wine made by big processing wineries which frequently have no significant brand of their own.
And they are very handy when drinking fashions change, and varieties once popular suddenly fall from favour. They move stuff.
Bulk Wine Online, Bulk Wine Broking, Fuse Wine Services, Ciatti Global Wine and Grape Brokers, Austwine Brokers, Wine Network New Zealand and Winegrapes Australia are just a few such merchants which can easily be found on the internet.
We call this huge bulk business the grey market.
Aficionados may find it interesting to keep an eye on just what these companies have available for sale, and wonder which labels it eventually carries.
While this is only one of many bulk merchants, cast an eye over this month’s Bulk Wine Register of Mark and Justine Cohen’s Malesco, a highly regarded but smallish brokerage founded in 1994.
Malesco currently offers a little over 30 million litres of bulk wine for sale. This is a tiny percentage of the total national inventory, which stood at 1.78 billion litres at June 30, 2013, but it’s a big number, nevertheless.
The cheapest parcels are from the appellation the Australian Wine and Brandy Corporation conveniently called South Eastern Australia, which is all the land south-east of a line drawn from Ceduna to Rockhampton. On the Malesco list, this region offers 90,000 litres of Chardonnay and 70,000 litres of Colombard at 60 cents per litre. This is only one of the many lists, remember.
At the top end, the Barossa offers 19,000 litres of Shiraz and 18,000 litres of Cabernet sauvignon at $12; Coonawarra has 12,000 litres of Cabernet at the same spend.
On this list alone, McLaren Vale has about 1.8 million litres of various varieties for the taking. It’s not the place to be growing Chardonnay: the region’s bottom price is $1.20 per litre for 32,800 litres. Just as silly is the notion of growing Pinot in the Vales. You can snap up 10,500 litres made from that cold-climate grape at $1.45. Sensibly, local growers are removing these varieties.
On the other hand, the Vales is, one would think, a very good place to be growing Grenache. Yet you have 60,000 litres of that at the same price: $1.45 per litre. There’s also 480,000 litres of McLaren Vale Grenache-based blends like the awfully named GSM available from $2.70 to $3.30.
McLaren Vale Cabernet tops out at $9.90 per litre (5500 litres); the top Shiraz is $8.80 (26,000 litres).
Many implications can be drawn from this list. You can view it on the Malesco website, as you can do with many other bulk brokers.
Ever seen a label saying the contents were bought on the grey market?
As in propaganda, I suggest there are three levels of market quite separate from your local son-of-a-gun winemaker who grows grapes, makes wine and sells it properly labelled.
In the propaganda business, white propaganda is the stuff where an obvious source ridicules or attacks its opponents. To the consumer, there is no doubt where this stuff comes from. A good wine analogy was Henley Hermitage, a ’70s red packaged to look like Penfolds Grange, which, to the consumer, was an obvious piss-take. It was called Henley because on Adelaide’s beaches, “Henley was one up from Grange”.
Henley Hermitage didn’t last long, but it remained a good joke for awhile.
Grey propaganda is the sort whose source is unknown. The consumer is not sure who concocted it, or what their desired result may be. But if such propaganda is effective, it will subliminally influence the consumer’s thinking in the way the propagandist desires.
Black propaganda is devised by one side to convince the consumer it really came from the other. Well-conceived, and well-packaged and delivered, this can be the most effective and efficient propaganda of all. Sometimes, as in the case of infamous, skilful artisans who produce fake bottles of, say, Penfolds Grange or Château Lafite from the cellar of Thomas Jefferson, we see examples of truly black marketing.
By the point of its final sale, most of the wine moved through Australia’s grey market usually fits the middle bracket. This greying of fact is not the fault of the grey marketeers, but those who buy it for packaging and resale, many of which we call virtual wineries. These have no winery or vineyards, and often live off the Wine Equalisation Tax rebate.
All this becomes even more intriguing when we consider a huge wine merchant like Woolworths, owners of BWS and Dan Murphy’s. Woollies is also Australia’s biggest contract wine bottler, so it can very easily keep an eye on what its rivals and potential suppliers produce. Its retail end easily learns how such wines sell.
Similarly, it owns Langtons, our biggest bottled wine auctioneer, a business which ranks the importance of premium Australian wines through its own famous classification. So while Woolworths has a very serious hold on the tertiary market, it also kicks large arse in the primary and secondary sectors.
Woolworths also owns its own winery, the huge Chateau Dorrien in the heart of the Barossa, where it makes wines for Cellarmasters, our biggest direct mail-order home-delivery wine producer. It has increasingly used this Dorrien winery to make wine for its own stores using fruit it buys direct from growers, cutting bulk brokers out of the game.
But Woolworths has begun buying its own vineyards in the Barossa. It has also bought what we used to call The Derailment, that strange assemblage of old railway carriages Wolf Blass and John Gordon put together in the ’70s to make a cheap motel. This will give Woolies space to expand its big winery next door – it had already sought more winemaking facility when it attempted but failed to buy the ailing Constellation Wines’ 50 per cent stake in the new Barossa Valley Estates winery at Seppeltsfield/Marananga in 2011.
While the fussy wine drinker may question the way grey-market wine is packaged for sale, there’s little chance of this overall murk ever clarifying. Even if Woolworths increasingly grows, makes and packages wine for sale through its own shops, it seems to fully appreciate the extra respect given wine that looks like it was grown and made by small family wine businesses. Ever seen a mention of Woolworths on the stuff that covers most of the floor in Dan’s and BWS?
In the propaganda appellations, would the best metaphor be white, grey or black?
