On September 30th I took part in a debate in which five panellists were invited to chew over this proposition. (My four fellow debaters were Geoff Merrill, Christian Lopez of Concha y Toro London, Adrian Atkinson of Pernod Ricard and Jonathan Butt of Wine Rack, and the debate coincided with a London tasting of some of the medal-winning wines from this year’s International Wine and Spirit competition.) Chair Robert Joseph had circulated some discussion topics beforehand, so I thought it might be interesting to post some written responses here to those questions. On the day, of course, the discussion was free-range, though Robert chose to make the discussion a trade-centred one rather than embrace its aesthetic dimensions. (If you’re not a wine trader, therefore, you may find this post dull enough to skip.)

Background? The fundamental statistic is that Chilean wine exports globally were up 23 per cent in 2007, whereas Australian wine exports globally were down 12 per cent in the year to June 2008. In the UK, of course, Australia remains far ahead of Chile (191 million litres through the off-trade in the year to June 2008 compared to Chile’s 67 million litres), has a higher average selling price (£4.39 compared to £3.88) and less own-label business, but Chile is moving forward briskly (up 15% in volume and 16% in value in the year to August 2008) whereas Australia is treading water.

RJ: Australia made its name - and success -- in the UK in the days before discounting took off. How does the BOGOF culture change the playing pitch on which both Chile and Australia now have to play?

[Note for those lucky enough not to have any idea as to what BOGOF might mean: it translates as ‘Buy One Get One Free’, and is the one-acronym summary of Britain’s most recent retailing revolution.]

The UK’s ferocious discounting culture means that anyone selling here needs to come in with their eyes wide open. Oscar Wilde’s famous comment about ‘feasting with panthers’ referred to a very different sort of encounter, but it seems an appropriate and cautionary analogy for hopeful, small exporters trying to sell into the UK supermarket scene. But the game is the same for everyone, whether Chilean or Australian, Spanish or Italian.

I think it’s important to remember that not not every wine on every supermarket shelf is discounted, and that non-discounted wines still sell and make a living for their producers.

After that, exporters need to segment what they are offering carefully into the discountable and the undiscountable, or price the disounting component into the whole sales structure from day one. The less discounting you can get away with, the better. Market share acquired on the back of discounting is usually unsustainable. Market share acquired without discounting has a better chance of enduring.

Medium-sized or large producers can certainly cope. Discounting does, though, make life much harder for smaller producers, and I lament that.
In the end, the main losers (paradoxically) will be consumers, since it will always be the least interesting or least ambitious wines which get discounted, therefore a larger and larger percentage of consumers will spend a greater proportion of their lives drinking less interesting and less ambitious wines. Producers also lose out, since the discounting culture turns consumers into promiscuous deal-junkies whose only loyalty is to the latest offer. The only beneficiaries are the retailers themselves.

RJ: Regionality is the buzz word of the day. But how realistic is it to expect consumers to learn about and remember Robe and Rapel when a university graduate at the BBC the other day asked me if Rioja was a grape or a place?

You don’t have to understand regionality to taste it and enjoy it. For the vast majority of consumers, regionality just means a diversity of tastes and flavours. Most consumers tend to pick up on it in an unpredictable, unsystematic and chaotic way, but they still enjoy it. When I talk to ordinary consumers (as I do at Waitrose Food Illustrated lunches every month), I note that almost everyone seems to have at least one left-of-field wine from here or there which they think is marvellous and that they always look out for. Château Musar is perhaps the most recurrent example. What they’re enjoying is a wine which is typical of Lebanon’s Bekaa valley, even though they may never have heard of the Bekaa valley.

Producers and retailers are absolutely right to emphasise regionality, since in the end that is the principal generator of difference and interest in all wine from all places. Amen.

RJ: Part of Australia's success with opinion formers has been through the personal efforts of its winemakers to explain what they do. Do you think Chile's winemakers are achieving the same results?

Yes I do. They are mostly very friendly, very charming, very open, and they speak good English. I’m very impressed.

BUT … for Britain and for Brits, nowhere is like Australia. You won’t find many British families that don’t have cousins, uncles, grandsons or girlfriends in Australia. I was recently checking the population figures for Adelaide and discovered that by far the largest immigrant community there, 10% of the entire population, is not Greek or Vietnamese but British. For all those complex historical reasons, there is almost a sense in Britain that Australian wine is ‘our’ family wine from the other side of the world. We’re all related. Obviously we share the same language, but there is a sense of kinship and belonging between the British and the Australians which you never really find with the British view of America and Americans. I think that has helped Australia enormously in Britain, and it isn’t going to go away. Sport aside (and even the rivalry with Australia feels treasured and precious), everyone in Britain feels at ease with Australia and well disposed to Australia. You get a kangaroo in the Pooh Bear stories, not a llama. People drink Australian lager with Australian imagery in Australian bars, not Chilean lager in Chilean bars. Everyone wants to visit Sydney at least once in their life. I’ve never met anyone in Britain who told me they couldn’t wait to visit Santiago de Chile.

Chile itself is very strange to the average Briton. It’s a distant, bizarrely shaped country where they speak Spanish.

Something of the same thing applies to opinion formers. They probably aren’t going to achieve the same kind of joshing informality and mateship with Chilean winemakers which they have with Australian winemakers, even though the free flow of information and communication is good.

RJ: The wine market in 2008 appears to be increasingly polarised between cheap, "rootless", branded wines that could - and possibly do - come from anywhere, and highly priced "icon" wines that come with some form of critical or historical credentials. How does that affect both Australia and Chile, both of which should excel in the middle market?

In fact I think that both Australia and Chile are very good at branded wines as well as at the middle market. I also disagree with the implication that the middle market is problematic. Most of the consumers who I write for are people who buy from Waitrose, Laithwaites, The Wine Society, Majestic or independent wine merchants, and the middle market is a very important sector in all of those retailing locations. I think Chile and Australia have most difficulty at the ‘icon’ level (though I loathe the trivialising use of this word in this context), where Europe is still dominant.

RJ: There is some evidence that the Old World is fighting back, with young brands like Blason de Bourgogne now outselling everything else in the £6+ sector. Australia has never really convinced the public that it has "terroir". Is it too late for it, or Chile to do so now?

Not at all. The future for both is terroir, but this is a long, slow game. Europe has been researching terroir for twenty centuries or more. There is still a huge amount of site research and varietal experiment to do in both Australia and Chile. Both countries have to be ready, and I mean really ready, to commit themselves to that path as well, which they aren’t yet, since it requires a different viticultural and winemaking mindset to that which creates consistent, brandfodder wines. You have to undertake qualititative, restricted-yield viticulture, and you have to trust the raw materials and not bash them about and deface them in the winery. If you want place in your wines, you have to allow it to express itself, for better or worse – which means releasing wines on to the market which may seem strange or unusual or overly characterful at first and which will show inconsistencies from vintage to vintage. You have to give the market time to develop a taste for the taste of your places. But that’s the future, and both Australia and Chile are headed in that direction. Slowly. (Just as Europe is slowly learning how to create consistent brands.)

RJ: In an era where carbon footprints are becoming increasingly important, how much of a factor is the distance Australian and Chilean wines have to travel to get to the UK?

It is a factor, and one which will become increasingly important.

No product which travels by sea need, in the long run, fear carbon footprinting. A consignment of French wines under sail has just reached the UK. It’s true that the fuel container ships use at present is heavily polluting, but improvements will come, and eventually sail and solar power will be used as a complement to mechanical propulsion.

The big challenge, in fact, is not the distance travelled by the wine, but the glass container, and the phenomenon of bottling at source. Getting rid of both has big quality implications at present, but if we are serious about carbon footprints, then those are the two ways to most dramatically reduce the carbon footprint of Australian and Chilean wine.

RJ: Chile has attempted to establish the Carmenère as its USP counterpart to Australia's Shiraz. So far, this doesn't seem to have worked. Most consumers probably associate Chile with Merlot. Does this matter?

I’m not sure that it hasn’t worked. I think it is working. But it is of course a slow process. The main problem is that Carmenère is a much more difficult name to pronounce than Shiraz. Maybe they could rename it Carmen. (No, please don’t.)

As someone who would probably chose a bottle of Pomerol for my own last supper, I don’t see that being associated with supple, enticing, comely Merlot is in any way problematic.

On the broader question of varieties, though, let me say that I feel very strongly that both Australia and Chile are far too limited in terms of the varieties used, Australia almost catastrophically so. Grape varieties are one of the two keys which unlock terroir (or regionality if you prefer), and if you limit the range of grape varieties you use, you risk failing to reveal terroir. Both Australian and Chilean wine lacks diversity and articulacy because neither country yet has enough different varieties to play with and experiment with. Where are Albariño, Assyrtiko, Feteasca Regala, Furmint, Grenache Blanc, Gros Manseng, Grüner Veltliner, Harslevelu, Malvoisie, Marsanne, Petit Manseng, Picpoul, Roussanne, Silvaner, Tamaioasa Romaneasca or Vermentino in Chile or Australia? What’s happened to Verdelho, considered Australia’s greatest white varietal by A.C.Kelly in the 1860s? They are either little grown or absent. All of these varieties can produce great wines in the right locations. And that’s just the whites …

RJ Australia built its success on a relatively simple message: rich, fruit-driven, usually oak-inflenced wines. Today, the message is more mixed (thanks to the growing number of unoaked wines from cool climates). Wine writers embrace this complexity, but is it as popular with consumers? And are there lessons to be learned by Chile?

I’d substitute ‘intensely flavoured’ for ‘rich’ in that question.

It’s a complex question to answer, because some of Australia’s unoaked wines from cool climates have been made in a very Australian way: clean, pure, tight and taut, but sometimes lacking soul, allusiveness, articulacy, and the winemaking space to breathe and unfold and be what they will. If they haven’t gone down well with consumers, then it may sometimes be the winemaking rather than the terroir which is problematic.

Furthermore, fully ripe cool-climate wines in the sunny southern hemisphere often end up at 14.5% abv. There is a challenge about incorporating that alcohol which hasn’t yet always been successfully answered.

The lesson for Chile is not to forget about cool-climate locations, but to be as sensitive as possible to their requirements in both vineyard and winery. Take risks; be daring; allow the sense of place to blossom inside the wines, even if the result is very different from everything else on the market.

RJ: How important is history (both of regions and wines) in the marketeting of Australian and Chilean wines?

It’s not of primary importance, but it helps create the ambiance for a wine, to give it a sense of cultural hinterland. This is thought to be a European strength, so it is important for Australia and Chile to compete there, too.

RJ: Chile has begun to exploit an image of making "green" organic and biodynamic wines. Does this give it an advantage over Australia?

I’m not sure that this is true. Even if it is true, I don’t think consumers have noticed. I think New Zealand’s ‘clean, green’ generic campaign has led the way there, and Hardy is exploiting this seam, too, with its Banrock Station advertising, as Fetzer has done in California. Everyone will pile in in the years ahead. So much the better, providing it isn’t just greenwash.

RJ: Australia has benefited from wine tourism. Is this an area Chile needs to exploit with greater vigour?

Yes – but it won’t be as easy for Chile. There are all the cultural links between the UK and Australia which I alluded to earlier, which Chile doesn’t have.

Chile is also an expensive destination, and a complicated one. It’s great for wealthy tourist sophisticates, since it is a one-nation geography encyclopedia. But for the ordinary guy and girl, what are the options? The capital city has a pollution problem and horrific traffic. The coastline is foggy; the sea’s icy. To get anywhere, you have to climb onto a plane, and then the options are desert, glaciers or somewhere that looks like Worcestershire with volcanoes. And you need to speak Spanish. It’s not really an easy, goodtime, triple S destination like Australia is.

RJ: The US and UK tastes in wine vary quite significantly (in terms of alcohol, sweetness and oak). Chile is inevitably influenced by the proximity of the US. Is this a factor that needs to be taken into account when comparing the two countries' potential in the UK?

There’s a one-word answer here: Yellowtail. Its range of sweet ‘dry’ wines has been a huge success in the States; but Yellowtail has failed to achieve the same impact over here. At the level of branded, commodity wine, in other words, Australia can produce wines to cater for both markets -- and so can Chile. In the middle market and among fine wines, tastes are less polarised – and quantities are smaller, so a success in either market is often all that is needed.

RJ: Australia is hoping to increase its presence in the on-trade. Is this really going to happen? And can Chile do the same?

It will happen -- if both countries do three things. (I am assuming ‘on-trade’ means serious restaurants rather than pub chains.)

One is to plant a greater range of grape varieties. Only very timid diners go for Australian Chardonnay or Chilean Cabernet when they go out to dinner. New varieties at least provide a reason to give an Australian or Chilean wine a chance in that context.

The second is to continue to research and embrace regionality, and to keep researching winemaking locations which deliver balanced, characterful fruit which doesn’t require a lot of winery correction.

And the third is to learn to allow their wines to express their origins, even if the finished character of the wines lies outside the existing qualitative parameters established by industry forbears.

Restaurant diners want balanced, drinkable, food-friendly wines with a sense of place to them. Classy packaging helps, too, and both Australia and Chile have a long way to go in that respect, too.