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harvey steiman at large

What Is Australian Wine?

Photo by: David Yellen

Posted: Dec 18, 2006 1:13pm ET

An importer and exporter who were in on the beginnings of the Australian wine surge in the United States visited me in San Francisco last week. By coincidence, they both stopped by on the same day, suggested the same restaurant for lunch, and made the same telling comment about the state of Australian wine here.

They said, to quote Yogi Berra, it's "Déjà vu all over again."

When they started plugging away at selling good Australian wine in the United States, it was an uphill battle. The prevailing opinion 15 years ago was that Australia made lots of good, cheap wine. They had what they thought were some pretty good wines that cost significantly more. Retailers and restaurateurs looked at them like they each had two heads until the perception finally set in that Australia was indeed capable of competing with the best from anywhere.

We all know what happened next. Insiders discovered Australian Shiraz at the high end, while the the mass market went for low-priced crowd-pleasers like Yellow Tail. Once again, the Tail is wagging the dog (or whatever other animal happens to be on the cheap wine's label). Both wine sellers report that the U.S. market is resisting the influx of high-end Australian wines, just as it did in the beginning.

"Australia is not hot anymore," says Dan Philips of Grateful Palate, who stopped by with winemaker Chris Ringland in tow. Ringland, who made the wines at Rockford, including the Basket Press Shiraz, was one of Philips' early finds. He has since taken over as the U.S. importer's go-to winemaker, now that Philips' long-term partnership with Sparky and Sarah Marquis has ended in court.

"A phase is over," Philips continues. "What will happen next will define what Australia really is."

"Australia has become so familiar to American wine buyers that they think they know what to expect," says John Larchet, whose Australian Premium Wine Collection exports some great wines too, including Grosset and Elderton. "Today we have to prove all over again that the wines we are putting forward are worth it. It's bizarre that we have come full circle."

Philips and Larchet can be relatively sanguine about things because they aren't trying to build a business from scratch anymore. Instead, they are trying to expand Americans' consciousness to accept wines like Australia's crisp, dry Rieslings, zingy Victorian Shiraz and, yes, maybe a Cabernet Sauvignon or two.

Meanwhile, both have gotten into the value-wine game. Philips has his own Marquis Philips brand and Paringa Estate, a partnership with grapegrower David Hickinbotham to make $10 wines. Larchet makes Hill of Content and Wishing Tree, which tend to be more bright and crisp than Philips' delicious fruit bombs.

Neither of them will ever come close to Yellow Tail's massive sales numbers, but they're happy to keep plugging away at finding distinctive wines that just might broaden the scope of how America thinks about Australian wine.

Personally, I think the resistance to high-priced wine is not limited to Australia. The free spending that made cult favorites of $200 Napa Valley Cabernet, $300 Barbaresco and $500 garagiste Bordeaux has waned. The wine drinkers I know are asking themselves if it's really worth it, and they are looking for good wines they can afford without selling stock options.

And oh, by the way, the restaurant both Philips at Larchet wanted go to was Bong Su, the relatively new upscale Vietnamese restaurant. I'll blog later this week on how some Aussie wines fared with the food.

Glenn S Lucash
December 18, 2006 6:22pm ET
I have written in the past about the unbelievable dinner we had this past August at Michael Mina. When I couldn't get a reservation at The Slanted Door the night before, our concierge at The Four Seasons recommended Bong Su. He said it was wonderful and a short walk from the hotel near The Modern Art Museum. We found the place beautiful inside, service was excellent and the food beyond our wildest dreams. We ordered a number of appertizers and one entree so we could try all the different flavors and presentations. Michael Mina it's not, but neither are 99.99% of all the other restaurants in the USA. We highly recommend this restaurant.
Scott O Neil
UT —  December 18, 2006 9:07pm ET
I think you are spot-on when you say that resistance to high-priced wines is world-wide... and isn't that the way it should be? Doesn't this speak well of the market's (especially in the U.S.) increasing saaviness? There's more and more great wine to be had at reasonable prices, so if a winery wants to charge more for a given wine, they've got a serious challenge to prove themselves, and I think that's good. I regularly buy Torbreck's top wines, for instance, but they've proven themselves to me (and others), and they're reaping the rewards of lots of hard work. God forbid that selling a $100+ bottle become too easy!
Paul Wright
December 19, 2006 9:49am ET
The market seems to have a split personality. Bordeaux isn't having any trouble selling its wines at giddy heights but then they're not your regular or even special occassion wines. Would agree that the majority of 'interested' wine drinkers are looking for better value but still good quality . The big issue for Australia in HK and possibly the US is the prices have risen. Leeuwin Chardonnay has gone up in HK over 65% in the last few years. I'm sure some of it is down to currency but the 6 bottles I used to buy are now 4 and I spend the money I save on trying new wines which offer better value but still great quality. Then again I guess that's how the world discovered quality Australian wine in the first place.
Dave Joyce
Winston-Salem, NC —  December 22, 2006 10:25am ET
Harvey - You talked with two of the best in Dan Philips and John Larchet, but I think the trend that they are talking about, the softening in the market for higher priced Australian wines, is actually caused by the success that these two and other great importers like Southern Starz, Vine Street, Epicurean, have had in finding great value price Aussie wines. Let me try and make my point using Dan's Grateful Palate portfolio.

As a retailer who has specialized in Aussie wines for over 10 years, we never had any trouble selling Dan's top wines (Rockford, Noon, Henry's' Drive, Shirvington, etc.,etc.) until late 2005. Don't get me wrong, we still have a core of customers that scoop up these wines, but not in the quantities as before. The reason, we believe, is the success of the value brands Dan introduced after his slam dunk with the Marquis Philips line. It is one wine in particular, the Henry's Drive Pillar Box Red, made by Chris Ringland and selling for around $10, that started the decline. With this wine, plus others in Dan's group like Hare's Chase Barossa Red, Roogle Red, Longhop Boomerang, Paringa, all selling for $10 to $20, that has taught our customers that there is no need to pay $40+ for a great Aussie wine, when there are so many incredible choices under $30.

You own review of the 2004 Schild Estate Shiraz is case and point. A 96 point, incredible tasting Shiraz for $25?? Why pay $50+ for Shirvingtons, Clarendon Hills, etc., with tons of these type values out there. Our customers definitely have not abandoned Aussie wines, they are just buying greater quantity of these fantastic under $30 values, and only a fraction of what they used to in the over $40 and up category. I can make this same point with most of the top importers (John Larchet's Hill of Content, Epicurean's Cimicky Trumps and Black Chook, Southern Starz Bleasdale, etc.)

What do you think about this theory?
Harvey Steiman
San Francisco, CA —  December 22, 2006 11:42am ET
Dave makes a great point about the high quality of the value wines from good importers and exporters. But those wines were there before late 2005. I put Paringa on the cover of a value-oriented WS story three or four years ago. What's different now is that consumers are finally getting smart. The years of following the high-priced hype are over. The wine had better be worth it. And that's the way it should be.
Apj Powers
Dallas, TX —  December 28, 2006 2:05am ET
It's 10 days since you started this blog. I was just in the cellar of the restaurant earlier tonight thinking how slow the AU sales were. I have 3 btls or less of most AU wines right now. No hurry to re-order. Nothing seems to be moving or to excite anyone. Two Hands seems to be the easiest to hand sell. Bin 389 is the only one I order by the case. The Ares, RWT, Grange, Branson Coach House, Joseph Angel Gulley, Henry's Drive Rsv, Wolf Blass Black - they are all just collecting dust. My personal AU wine of the moment is the Amon-Ra.

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