Karlene Maywald MP Member for Chaffey

Report

On

Study Tour

To examine

Fresh Fruit & Wine Export Opportunities

In Europe & Britain

Travel Dates:

14 May 2002 to 26 May 2002

Objectives of Travel

1. To investigate South Australian export opportunities & support Riverland Exporters with particular reference to:

Fresh Fruit Export Opportunities in Europe Wine Export Opportunities in Europe & Britain

2. To support Riverland and other Australian wineries at the:

London International Wine & Spirit Fair

Delegation Participants Mr Phil Simms, Chair, Riverland Development Corporation Mr Trent Mader, CEO, Riverland Development Corporation Mr Graham Gates, Riverland Austrade Officer Mrs Karlene Maywald MP, Member for Chaffey

10 Riverland Winery representatives exhibiting at the London International Wine & Spirit Fair

Organisations Visited

PARIS

Australian Embassy, France

Met with the Ambassador, Mr William Fisher and the Hon Mark Vaile MP, Federal Minister for Trade to discuss trade issues.

Rungis Wholesale Food Market

The Rungis Wholesale Food Market is the largest fresh food market in the world. Riverland businesses have been exporting fresh fruit (stonefruit and citrus) for distribution to European markets through agents at the Rungis Market. The Rungis Food Market is known as the gateway to Europe for fresh fruit exports and we were advised of produce from a Riverland exporter that sold through an agent at Rungis to Harrods in London.

Our tour was conducted by Anne Borgo, Marketing Senior with the Australian Trade Commission. Austrade Paris has undertaken Market intelligence investigations on behalf of the Riverland Development Corporation into the Fresh Stone Fruit Market in France. An extensive report entitled “Stone Fruit Market – France” has subsequently been produced and is available to producers through the Riverland Development Corporation.

Fresh Food & Wine Retail Outlets

Tour of Paris food retail outlets, supermarkets and wine distributors. The diversity of retail outlets and the substantial price differentials for produce depending on quality, offers substantial opportunities for South Australian producers. Austrade has an ambition strategic plan to increase the number of exporters.

LONDON

South Australian Agent-General

Delegation met with Mr Maurice De Rohan to discuss the future opportunities and challenges for the South Australian Wine Industry in the United Kingdom. Mr De Rohan is a strong advocate for South Australia and provides valuable points of contact for South Australian Exporters. The office of the SA Agent General were preparing for a significant promotion event for the Australian Wine Industry in conjunction with the office the Australian High Commissioner.

Australian High Commissioner Delegation met with the High Commissioner, Mr Michael L’Estrange.

Trade issues and challenges ahead for Australian Exporters were discussed.

London International Wine & Spirit Fair

The London International Wine & Spirit Fair is a three day trade fair offering trade purchasers the opportunity to see over 1,100 exhibiting organisations from around the world. Ten Riverland winemakers exhibited at the fair. BRL Hardy and Southcorp had individual stands which reflected the market presence they currently enjoy in the U.K. Smaller Australian wineries exhibited at the stand organised by “Wine of Australia” or with individual agents appointed to market their product. The competition for the lucrative U.K. market is fierce, with the “New World” wine countries such as Chile, Argentina and South Africa having a very big presence at the fair. France is also aggressively marketing to claw back market share in the price points that Australia has been most successful in.

The South African, Argentinean and Chilean exhibits were highly visible and well defined, whereas the Wines of Australia stand did not have the same visual impact. Comparative photographs can be viewed in the attached power point presentation. Our delegation met with Australian exhibitors and discussed the challenges ahead for the Australian Wine Industry and the success of the Fair. All exhibitors commented that the Fair was extremely worthwhile and had provided new export opportunities for their businesses. Exhibitors also commented that the competition, particularly from the New World Countries, was intense and that Australian Wineries could not afford to be complacent in their marketing and quality/price management. Issues associated with over supply of grapes and the impacts on export marketing, as well as chain of supply quality issues were also discussed. The industry has already achieved the export targets set in the 2025 plan, and the challenge ahead to further grow market share will be significant.

Wine & Fresh Food Retail Outlets

The delegation visited the following retail outlets to investigate market opportunities, customer expectations and niche markets: Sainsbury’s Sainsbury’s is a ‘surburban’ outlet catering more for the family shopper. Fresh food was not of a particularly high standard and price points reflected this. At this time of year fruit was sourced mainly from Spain. The wine selection targeted the low to mid price ranges, with minimal selection of high quality wines. Wines were displayed by country of origin. French wine dominated the shelves, however Australian Wines held shelf space similar to that of other “New World” wines.

Marks and Spencer

The delegation visited the Covent Gardens store which tailored their product lines to appeal to office workers. Fresh fruit was conveniently packaged, ready to serve/cook for one to two people.

The wine selection was more up market than Sainsbury’s, again displayed by country of origin. An in-store promotion featured Australian wines.

Waitrose

Waitrose perceive themselves as being more in touch with their suppliers and have more organic produce. Fresh fruit quality was reasonable, and price points were similar to Marks and Spencer. Australian wine selection was greater than Marks and Spencer, but smaller than Sainsbury’s

Harvey Nichols & Harrods

Harvey Nichols and Harrods highlighted the high end of the market, focussing on quality and dealing in smaller volumes at a premium price. French & European wines dominated the shelves, with a small Australian presence in the premium end. Interestingly “Torbreck” wines from the Barossa Valley featured as a result of an ex Harrods employee now working at the winery (the salesman’s story!!). Premium prices for fresh fruit were at the extremely high end and were packaged for convenience and presentation. A Riverland exporter visiting London a month earlier found his label of peaches on sale for £14.99 per kilogram. The fruit was purchased by Harrod’s through the Rungis Wholesale Food Market in Paris.

Recommendations

1. The South Australian Government should explore opportunities for the development of programs to promote South Australian wine and fresh fruit in export markets.

2. The Riverland Development Corporation and Austrade should continue to

work cooperatively to promote a strong export and market access focus in conjunction with our overseas offices.

3. The South Australian Government should continue to fund market awareness

programs to equip our producers with the knowledge base and skills necessary to be successful in the highly competitive global market place.

4. The South Australian Government should continue to support the Office of the

South Australian Agent-General as an effective and informative shop front for South Australia in the U.K.

5. The South Australian Wine Industry representative organisations should seek

to revisit the 2025 plan to develop new goals and clear direction for all sectors of the industry.

Reference Documents and Publications

Austrade – The UK Stonefruit Market Austrade – Visiting the Market – France Harrods – The Wine Shop The London International Wine & Spirits Fair – Official Show Catalogue Member for Chaffey - Power Point presentation “The London Wine Fair”

Slide 1

London International London International Wine & Spirit FairWine & Spirit Fair

2121stst –– 2323rdrd May, 2002May, 2002

Slide 2

BRL Hardy StandBRL Hardy Stand

Slide 3

SouthcorpSouthcorp StandStand

Slide 4

National PavilionsNational Pavilions

7676SpainSpain108108South AfricaSouth Africa

3939ArgentinaArgentina2222CaliforniaCalifornia5858ChileChile181181FranceFrance

3030AustraliaAustralia

106106ItalyItaly

Number of WineriesNumber of WineriesCountryCountry

Slide 5

Wines of AustraliaWines of Australia

Slide 6

Wines of Australia Wines of Australia (Kingston Estates)(Kingston Estates)

Slide 7

ArgentinaArgentina

Slide 8

ChileChile

Slide 9

South AfricaSouth Africa

Slide 10

Agency Stand Agency Stand ((SalenaSalena Estates)Estates)

Slide 11

Agency StandAgency Stand(Various Products from Various Countries)(Various Products from Various Countries)

Slide 12

Australia’s Top TenAustralia’s Top Ten(Source: The Advertiser, Wednesday July 3, 2002)(Source: The Advertiser, Wednesday July 3, 2002)

55

44

33

22

11

GriffithGriffithNSWNSWBarramundiBarramundicab cab -- merlotmerlot

CranswickCranswickPremium Premium

BarossaBarossaSASAWolf Blass Yellow Wolf Blass Yellow cab cab –– savsav

BeringerBeringer BlassBlass

BarossaBarossaMostly SAMostly SAJacob’s Creek Jacob’s Creek shiraz shiraz --cabcab

OrlandoOrlandoWyndhamWyndham

RiverlandRiverlandRiverlandRiverlandBanrockBanrock Station Station shirazshiraz

BRL HardyBRL Hardy

MilduraMilduraRiverlandRiverlandPadthawayPadthaway

LindemansLindemans Bin 65 Bin 65 chardchard

SouthcorpSouthcorp

MadeMadeSourceSourceFlagshipFlagshipCompanyCompany

1010

99

88

77

66

MadeMadeSourceSourceFlagshipFlagshipCompanyCompany

NSWNSWRiverina, Riverina, CoonawarraCoonawarra

HandwoodHandwoodEstate shiraz & Estate shiraz & chardchard

McWilliam’sMcWilliam’s WinesWines

NSWNSWSASABlack Label Black Label shirazshiraz

Brian Brian McGuiganMcGuigan

NSWNSWNSWNSWUndisclosedUndisclosedCasellaCasella WinesWines

BarossaBarossaSA, SA, mainly mainly RiverlandRiverland

Oxford Oxford LandingLanding

YalumbaYalumba WinesWines

RiverlandRiverlandRiverlandRiverland, , SunraysiaSunraysia

Coral Sands Coral Sands cabcab--savsav--petitpetit--verdotverdot

Simeon WinesSimeon Wines

Australia’s Top Ten (cont.)Australia’s Top Ten (cont.)(Source: The Advertiser, Wednesday July 3, 2002)(Source: The Advertiser, Wednesday July 3, 2002)

Slide 13