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January (No. 492)
We’re cheapening the Australian brand
The editor,Heads of Rosemount, which, by its reverse takeover of Southcorp and the replacement of Southcorp management with its Rosemount private-company-thinking executives, mortally wounded two successful companies, lost market share, destroyed a distribution network and created an internal wine surplus for which no brighter marketing solution was on offer than slash and burn.
The Australian wine industry in export has lost its spark, lost its way and is heading for Argentina. From being the excitement of the UK or USA we have moved to the commodity product.
The Australian brand is being killed, more and more it means “cheap”. As an English wine wholesaler described it we are “dumbing down”. We have replaced good-value-for-money with cheap. ‘Australian’ in the UK now means 4.99 to 9.99 pounds. In the USA it means $6.99 to $14.99. Increasingly the consumer attitude is: “that’s the price of Australian wine, you wouldn’t pay more”. Export has been turned from a lucrative business to bare bones and we have done it all ourselves.
“Ourselves” is a bit of a generalisation because most of us have had no input.
So who would you line up as your top three culprits for the dumbing down of Australia’s once very positive and profitable position in our two key markets of the UK and USA?
For me it is:
Treasurer Peter Costello who for six years refused to pay heed to the Wine Grape Growers Council of Australia’s request that the Government remove the tax incentive [three-year write-off] for new vineyard development. This has resulted in a gross over-planting funded by organisations that have no interest in this business.
The Australian Wine & Brandy Corporation with its 25-year plan. But I say this one with tongue in cheek because if they hadn’t given us an objective we would be still bungling along, unable to meet demand and selling it to only the top 25% of the market. The plan was right and inspiring but it unfortunately also inspired corporate opportunism at many levels; from tax minimisation schemes, to creating a grape surplus to control prices, to chasing market share at any price.
These are my anti-heroes but other people must have a different view.
Who are your three?