More sobering reading is doing the rounds regarding the woeful state of our wine industry for grapegrowers and producers alike. While I feel very sorry for many of those involved, as someone with fingers in the pie of wholly less glamorous industries (sheet metal engineering & plumbing) I can’t help but think there would be fewer headlines not to mention a lot less wailing, gnashing of teeth and calling for sympathy or special treatment if you tried inserting ‘sheet metal industry’ or even ‘rubbish collectors’ instead of wine/winemakers. Suddenly, those sob stories seem much less eye-catching.
No, I am not being flippant. When it comes down to it, business is business, whether it is growing grapes, making wine, selling bananas or making stainless steel handrails. Presumably at least some of those caught up in the current difficulties are guilty of having jumped on the bandwagon, expanded too fast, taken on too much debt, not having sound business plans or making a sub-standard product – take your pick (and I am sure there are some guilty of the whole shebang). Sad yes, and there are undoubtedly some very nice and well-intentioned people amongst the casualties but really, as a business owner of another variety (sorry, couldn’t resist) I am also facing tough times and few seem to have bleeding hearts or trite excuses for me.
Rising costs including massive ACC hikes (up 40% this year for us), an industry wide downturn (construction and manufacturing is not in good shape at the moment either), a clampdown in sympathy (and credit) from the bank combined with suppliers who are rigorously enforcing trading terms and debtors who have slipped to an average 30—60 days before payment. These are not hurdles confined only to those in the wine business. It’s not fun at all but no surprise – I have yet to see many headlines bemoaning the fates of all poor sheet metal engineers and other trades like ours out there. My own businesses have now been running nearly 30 years, something I suspect is helping to keep the wolves from the door, and have been around long enough to see bust and boom before so I know that except perhaps in the odd cases of very bad luck, it is generally poor business management or inferior product/service that deals the coup de grace to companies.
These are difficult times indeed, but given the recent massive unbridled growth coupled to a heap of wine with little to differentiate it from any number of others on the market and often little in the way of genuine quality to offer, it is perhaps sad but certainly not surprising. When so little of the production is profitable (a 2007 academic paper stated 90% of producers were ‘uneconomic’) and all it took was one large harvest to throw the train off the track the $1 billion of exports seem to be more smoke and mirrors than something to point at to illustrate our success. Generally, a large, quality harvest for a sound region means boom times (ask Bordeaux) not bankruptcy, mass discounting and plummeting critical acclaim. Woeful governance is certainly a factor here (and the hasty switch from ‘they can’t get enough of our wine’ to ‘quick! plant fewer grapes/make less wine would be comical if it wasn’t for the carnage it is echoing) but the cash crop mentality, lack of long term planning and willingness to be the quantity hare rather than the quality tortoise it is so obvious our geography and size dictate means the blame also lies squarely with those who didn’t do their Business 101 homework.
The fact there is talk of vine pulls so soon after the last cull should give pause for though to some of those moaning about how tough it is for little old them as it suggests little in the way of forward planning let alone the commitment to quality and integrity needed to make the industry sustainable and profitable. Woe betide any business - sheet metal or grape driven - that ignores such basics, as the headlines now bear witness.