Australia head hits out

12 November, 2010

Paul Henry, outgoing general manager, market development for the Australian Wine and Brandy Corporation (AWBC), has accused retailers of being only interested in “volume and price” and described retailer consolidation and price compression as direct threats to proprietary brands.

“Retailers are not interested in building brands,” he said. “The reality is first and foremost: volume and price.”

Henry also described the large Australian wine producers’ strategy of chasing volume at almost any price as the “price of everything, the value of nothing”.

In London this week interviewing candidates to replace Lisa McGovern, who resigned recently as the UK and Europe head of Wine Australia, Henry convened a special briefing during a tasting of sparkling and dessert wines at the Australia Centre.

During the impassioned briefing Henry said Australia needs to find a new identity – “not Old World, not New World, our world” – new ways of communicating with wine consumers and new channels to get wine to them.

He said the challenge for the Australian wine industry was to “rattle the cage of world orthodoxy”
and predicted a number of well known Australian wine brands would disappear. “Some brands will disappear from the market because they cannot afford to stay in the game,” he said.

An acrimonious debate has been carried out in the UK trade press, principally Harpers Wine & Spirit Trade Review in which Paul Schaafsma, the head of Australian Vintage’s UK and Europe division, openly criticised Henry’s concentration on promoting more premium wines and emphasising the continent’s regional expressions at the expense of the major volume brands which tend to cross regional blends.

It is wines such as Jacob’s Creek, Lindemans, Rosemount, Penfolds, Wolf Blass and Yellow Tail that have been the foundations of the success of Brand Austalia globally.

Henry commented: “I’m disappointed to see it but not upset by it. It is disappointing and distracting but I have a slightly thicker skin. Otherwise, I would have given up years ago,” he quipped.

Describing Europe and North America as “mature markets” and Asia as an “emerging opportunity”, he warned that it will still be a long time before countries such as China would equal UK wine consumption levels.

He noted that while Hong Kong had overtaken New York as a market for fine wines, it was more about trading and investment than consumption.

During the briefing Henry also outlined details of A+, his initiative to promote Australian regional and fine wines, and took the opportunity to hit out at multiple retailers – particularly in the UK – and respond to critics of his policies and tenure.

He said Australia needs to seek out new consumers, new channels and new media and, rounding on his critics, said that a failure to evolve was “Darwinian” and would result in companies not surviving.

Turning to A+, Henry said Australia needs to improve its image, price and representation. It was an “intersection to be more targeted, defined and commercially relevant”. A+ was an attempt to “connect with excellence and high achievement.”

With the new website being launched in January to coincide with Australia Day and the traditional Australia Day tasting in London, Henry said he was hoping to “start a new conversation about Australian wine”.

Working with Wine Intelligence, the AWBC was researching wine consumption in six key wine-consuming countries – China, Japan, the US, Canada, UK and Sweden.

Henry cited Pernod Ricard’s Jacob’s Creek brand as a volume brand from one of Australia’s largest producers that had introduced a regionally based premium range.

Asked about his and Lisa McGovern’s successors, he said that he hoped to have offered the UK and Europe job possibly by the end of this week but he was not involved in the recruitment of his own replacement.





Comment

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