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Beating the Europeans a matter of communication

THE wine industry needs new leadership and government cooperation if it is to overcome the next challenge for growth – cracking the non-English speaking world, according to Evans & Tate’s Franklin Tate.

Mr Tate believes Australian wines have beaten traditional European producers to sell well in the UK and, increasingly, the US because they can communicate more effectively with customers than their rivals.

But that communication through shared language and culture evaporates when new markets such as Germany are approached.

These are vital to maintaining Australia’s export momentum, he said, yet the industry has put little thought into the campaign that is needed.

“We have not even started thinking about the challenges to marketing in these places,” Mr Tate said, raising the twin concerns of funding and leadership.

He said the industry was too highly taxed, which put the future at risk.

“There is a big role for government in this,” Mr Tate said.

“[Federal] Government soaks the industry dry and puts nothing back into it.”

“We need 15-20 per cent of tax back to promote wine in markets we need to get into.”

Poor relations with government – a big fault of the current leadership, he said – were further compounded by the recent collapse of the $40 million Australian Wine Centre project in South Australia.

“It is not just the amount of money that was lost,” Mr Tate said.

“$40 million is a lot for an industry that gets very little from the government.”

Mr Tate said he believed change in the industry’s leadership was overdue and predicted a very different set of leaders in two to three years’ time.

He said the leadership malaise extended to Australian wine’s opinion makers, who he believed needed an injection of youth. The current crop were: “Postulating their views to an ever decreasing number of cardigan wearing sycophants”.

Mr Tate has a recent history of disagreement with the wine industry’s national leadership.

In 2000 he quit as a member of the Winemakers’ Federation of Australia after clashing with the hierarchy over tax.

However, this week WFA chief executive Ian Sutton rejected Mr Tate’s criticism of the industry leadership.

Mr Sutton said the Evans & Tate chief’s decision to end his industry involvement two years ago was disappointing but also meant he was not closely involved with negotiations with government.

He said the WFA was pushing for changes to the Wine Equalisation Tax to allow an exemption of the first 600,000 litres of production – a concept driven out of WA.

“We are in a dialogue with the [Federal] Government, which we believe will deliver some results, hopefully before Christmas,” Mr Sutton said.

He said this push for lower taxes had to be seen against a backdrop of significant pressure for tax increases.

“In many cases, achievements are what you stop from happening,” Mr Sutton said.

The WFA chief said the failed wine centre in Adelaide was a South Australian Government initiative and the collapse could not be blamed on the industry.

He also said the industry was investing in non-English speaking markets. As an example, there was a native German employed full-time in that country to promote Australian wine.

Turning to opinion leadership, Mr Sutton said Australia’s wine critics had their good and bad elements, like anywhere else.

“If that is an issue it is a pity it has not been put before us. To a large extent we rely on that input to shape change,” he said.

However, Mr Sutton did agree that the industry could see some significant changes in terms of corporate leadership as producers came under growing commercial pressures.

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