Jon Osbeiston - merchant of wine
Tuesday, March 13, 2012
Justinian in Wendler on Wine

Justinian's wine critic Gabriel Wendler chats with one of Australia's premier wine merchants, Jon Osbeiston ... The state of the wine market ... Can China save our industry? ... Wine fraud ... The difference between toothpaste and wine ... A dozen favourites ... With video 

You have been in the retail wine business for some 30 years. I remember your first wine shop in York Street, Sydney, about 20 years ago, and now you have the Ultimo Wine Centre in Jones Street, one of the most impressive retail wine emporiums in the country. How did you get into the retail wine business? Has it become more or less difficult to sell wine?

I fell into retailing after a less than stellar university career. I was interested in wine at uni (perhaps too much so) and it seemed like a nice progression. The hobby became a job. Selling wine, in theory, should have become easier due to much more widespread consumption, but there are a lot of factors now with the supermarkets , the internet and many more licences - all of which make it a very competitive environment.

I spotted you ages ago at an auction of a selection of Max Lake's library. I know you have an outstanding wine and viticulture library. What are some of the titles in your collection that you most treasure? 

Some of the great early Australian works by James Busby included an inscribed copy to the Reverend Cartwright one of Sydney's early clergymen. Also, some of the earliest English works discussing wines including Sir Edward Barry's "Observations Historical, Critical, and Medical, on the Wines of the Ancients", Alexander Henderson "The History of Ancient and Modern Wines" and Cyrus Redding's "History and Description of Modern Wines.

I collect the works and writings of Andre Simon who was perhaps the leading wine writer of the 20th century. He's been very prolific with over 170 books and pamphlets to his name. His early books were very influential and important in wine scholarship. 

How has the internet influenced the retail sale of bottled wine?

It has had a big effect on wine clubs and helped cellar sales a lot. Also, it has created a wonderful price check for consumers. It will continue to grow and be a very important segment of sales, but at what cost for diversity of product? There is not a lot of reason for retailers to take stock positions only to find a garage operation on the internet with one case in stock is selling it at near cost to beef up a profile.

The internet is a great consumer market for buying, no doubt it can only get bigger for locally sourced products. Freight issues and taxes make it less interesting to use internationally.

You've travelled widely, particularly as a regular visitor to all the major wine making areas of France, dealing directly with merchants and winemakers. Do you maintain the same amount of international travel or has the internet reduced the need to chase wine abroad? 

Communications are obviously easier, but you cannot taste off an email. Tasting is still very important and that can never change and so some travel will always be necessary. However, the producers have realised they also have to travel to market their wines. With so much competition out there no producer can sit back and do nothing. 

The prevalence of Australian wine labels over the last 25 years has inflicted upon the wine consumer a measure of sensory overload. What is your prognosis concerning the marketability of Australian wine? Is it realistic to predict China will be the saviour of our bottled wine industry?

Unfortunately, we expanded far too rapidly, helped by the low dollar, and became recognised as a producer of great cheap wine. Again, unfortunately, the vast majority of producers in Australia cannot produce wine at a price competitive in the world market.

We have the almost unique situation of the market being controlled by a group of massive companies producing huge brands. They have never understood that wine is not like other consumer products. The more you get interested in wine the more you want to try different wines.

A brand of toothpaste you might use all your life without another thought, but serving up the same wine every night will not happen.

It is a real challenge for companies to keep their brand alive and selling. They are all obsessed with getting bigger and bigger. With the oversupply we have numerous really good producers who are having trouble selling their wines because the market is awash from vineyards that should never have been planted in the first place. It is a very tough situation for many producers.

There are far too many brands competing in Australia and with the strong dollar many doors have shut on the export market. China is perhaps the one shining light. They are certainly helping in  a big way. It's too early to tell whether they will become the saviour of the industry.

Fortunately, the Chinese do enjoy drinking wine and they are coming from a very low base, so there is huge potential. 

 

 

What is the volume of Australian wine going into China? Are the French/Europeans doing a better job than we are of marketing their wine? 

The volume has increased dramatically in the last five years. Latest sale figures are at  2.7 million cases in 2010 up 36 percent, making it the fourth largest export market.

I think the Australian wine industry is doing a great job there. Just look at the reputation of Penfold's in China where it is one of the most highly desired brands. I wish I had a dollar for each of the containers of Penfold's wine people have tried to order off me.

However, the Chinese consumers are very brand orientated and the Europeans, particularly the French, have an advantage with many historically world famous brands that they can leverage off as selling points. The Chinese definitely like our style of wines, so there is no reason to think sales will not continue to grow.

The one big problem is that most of Australia's premium producers, whom the Chinese want, don't have enough of their best wine for our own market, let alone for an ever expanding market. 

Do you think wine fraud is rampant - in particular the counterfeit wine market for French first growths, DRCs  and our own Grange Hermitage? 

It is certainly a huge silent issue. With the incredible high prices for many wines it can only get worse. Many Chateaux are taking anti-fraud measures with security labels. Provenance is the key when buying wine so that you can trace back the origin. 

In China there is  a huge industry for producing fake wines at all price points so that is a major problem, which can only be sorted by the lowering of import taxes there. The "seller" can make more money avoiding the import taxes than on the product. 

The wine points evaluation system had its genesis in the oenology department of the University of California, Davis. The university created  a 20 point system, however in about 1976 emerging wine critic Robert Parker Jr and his fellow wine evaluator Vic Morenroth expanded this to a 100 points scoring system. Although Parker Jr rarely gives any wine a score of a 100, nevertheless two  examples come to mind - Ch. Rayas 1990 and La Chapelle Hermitage of the same year, both wines scoring a perfect 100 Parker points.

In your experience to what extent does the 100 points wine scoring system influence the consumer in their choice of wine?  

I think it coincided with the explosion of wine information and Parker's influence after the 1982 Bordeaux reviews.

Up until then most wine writing was more general in the final judgement. Now someone was able to tell the consumer an exact score to determine quality. The scoring, particularly by Parker, had a profound effect on the market with his reviews becoming the make or break of wines and vintages.

While the influence of the points system has diminished somewhat there are consumers who look for a certain level of points before buying.

Wine just seems to create the most amazing levels of nervousness and uncertainty among nearly everyone when put on the spot to make a judgment. So when you have a trusted definitive source what better way to create certainty than by relying on the judgment of an alleged expert.

However, it does make all retailers lazy. 

What is your most dangerous or embarrassing commercial wine purchasing experience? 

No real dangerous experiences, except self-induced stupidity caused by trying to keep to unrealistic appointment schedules. Thankfully I'm prevented by much stricter French speeding controls on auto routes.

As to embarrassing purchases, we all have skeletons in the cupboard. My usual problem has been a flawed mathematical equation - surely I can sell 60 bottles of this wine since Australia has 20 million people.

How often can one be wrong? 

What are the six most outstanding Australian red wines and the six most outstanding European wines in your taste memory? 

A most difficult exercise, so I will throw in older wines that were drunk on memorable occasions with friends:   

Australian wines:

  1. 1937 Caldwell's Claret
  2. 1939 Mt Pleasant 'Mountain A' Dry Red
  3. 1953 Woodley's Treasure Chest Cabernet Sauvignon
  4. 1954 Tulloch Dry Red & 1954 McWilliams 'Richard' Hermitage
  5. 1959 Lindemans Hunter Riiver Burgundy Bin 1590
  6. 1994 Bannockburn 'Serre' Pinot Noir

Imported:

  1. 1921 Marc Bredif Vouvray Moelleux
  2. 1931 Quinta da Noval "Nacionale" Vintage Port
  3. 1945 Chateau Rayas Chateauneuf-du-Pape
  4. 1945 Armand Rousseau Chambertin
  5. 1945 Chateau Mouton Rothschild
  6. 1945 Chateau Latour 
Article originally appeared on Justinian: Australian legal magazine. News on lawyers and the law (http://justinian.com.au/).
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