Mornington Peninsula Vignerons Association

Annual Report 2008

Mornington Peninsula Vignerons Association

Annual Report 2008

Presidents Report

Fellow Members,

This will be my last report as President, as I will be stepping down at the upcoming AGM. Over the past 3 years I have also represented Mornington Peninsula on the Victorian Industry Association (VWIA) and the State Governments Vintage 2010 Steering committee and Victorian Food and Wine Tourism Council. Although I have done my best to represent the interests of the MPVA, our region and in these forums they have also demanded a lot of my time. It has been a great honour to represent the MPVA and thank you for your support and encouragement.

Looking back over the three years, I think that we have continued to make tremendous progress as a region and our reputation and profile continue to grow throughout Australia and overseas. Our demand attention wherever they are served and we are now home to some of the most exciting, sought after and respected wine brands in Australia.

Jancis Robinson recently wrote in the influential Financial Times (16 February 2008);

“…especially the Mornington Peninsula south of with its high density of ambitious vine growers …. surely precisely the sort of region as to send a shiver down a French spine in that they fly in the face of the stereotype of as being solely technical, big company product..”

Attention is more and more being drawn to small producers and emerging wine regions that are focusing on their strengths and not attempting to be all things to all people. This is central to what consumers, restaurants and specialty wine stores are demanding. It is the emerging story, the next exciting chapter in the development of our wine culture. It is symbolised by a move away from the large, commercial and manufactured to the small, boutique and hand made.

This is also the central theme to Wine Australia’s new marketing platform, inviting consumers from around the world to discover what lies beyond Shiraz, , Barossa, Coonawarra and the big company offerings that Australia has become famous for.

This is where the emerging story of Australian and cool climate is beginning to be heard and regions such as Mornington Peninsula have a once in a lifetime opportunity to firmly establish their credentials and carve out a unique place in the Australian wine story.

There are 62 regions in Australia, so to be amongst the best known and recognised, regions such as ours must focus on their strength. For Mornington Peninsula, I strongly believe this must continue to be Pinot Noir. We do not have anything more significant to show or to invite consumers to explore than we do with Pinot Noir.

Every effort and resource of the MPVA should be directed to promoting the Mornington Peninsula wine brand and its association with Pinot Noir. In our five year strategic plan we agreed to adopt the tag line; “Mornington Peninsula – Australian Pinot Noir”, which is now being used by the MPVA on all its collateral and advertising. This is something we should all embrace and promote.

Domestic sales of Pinot Noir in Australia during 2007 were estimated to be 3.8 million litres, or 2.5% of the still red wine market. Although Shiraz and Cabernet dominate by volume (38.5% and 35% respectively), Pinot Noir is one of the most valuable and fastest growing categories (by value and volume) in the market. Together with the premium Chardonnay market, we are establishing a commanding position in two of the most valuable segments in the industry.

As we did last year, an analysis of James Halliday’s latest Wine Companion for 2009 confirms that Mornington Peninsula continues to be a leader in the production of high quality Pinot Noir and Chardonnay, well beyond any other grape variety that we grow. A summary of the results of the 2009 Wine Companion is as follows: Pinot Noir Number of Number of wines that wines 3 Year rated at rated at Average Wines Mean greater greater Mean rated Score than 94pts than 90pts Score All regions 372 91.0 102 244 90.6 Mornington Peninsula 78 91.9 31 62 91.8 Tasmania 79 91.1 23 51 90.4 61 91.3 21 40 91.0 35 90.4 7 21 90.5 Adelaide Hills 28 90.3 4 18 90.6 15 91.1 4 10 90.1 Macedon Ranges 11 92.0 4 8 91.2

Chardonnay Number of Number of wines wines 3 Year rated at rated at Average Wines Mean greater greater Mean rated Score than 94pts than 90pts Score All regions 659 90.6 166 403 90.5 Mornington Peninsula 57 92.1 27 48 92.3 Margret River 85 91.7 32 66 91.8 Yarra Valley 81 91.5 29 59 91.6 Hunter Valley 50 90.4 6 31 90.0 Adelaide Hills 44 91.6 17 33 91.7 Tasmania 35 89.9 6 18 90.4 McLaren Vale 27 88.9 3 6 88.8

These results demonstrate the quality of the wines being produced on the Mornington Peninsula and the potential that all producers have to access these highly valuable markets, something that is critical to all of us for our long term economic sustainability.

Mornington Peninsula Myth busting

Ever since Nat, Rosalie, Bails Myer and our early wine pioneers first established their vineyards in our region there has been no shortage of naysayers and critics who have volunteered their views on the prospects of our endeavours.

There have been many myths that have been dispelled, one by one, over the past 35 years and some that unfortunately still persist today. They started with things like: • “The Peninsula is too cold to grow grapes”, • “Pinot Noir, its light pink wine for fairies” (The Age), • “Wines are too light and green” • “Should not do malos”, • “Using wild yeasts can only be done in France and Burgundy”, • “Wines are inconsistent, thin and weedy”, • “Peninsula wines are over priced”, • “Vineyards are damaging the environment”.

What history has shown is despite the lack of information and experience of growing grapes and making wines in cool climates, incredible challenges were overcome. With the benefit of formal training, Nat White, Rick McIntyre and many others were able to understand the science and the risks whilst continuing to experiment and help establish what are today accepted norms for cool climate and .

The challenge of producing high quality wines in cool climates is much greater than in warm climates. Much of what was known and was taught in the early years related to warm climate winemaking, for example; wild yeast ferments and malos were frowned upon because in warm climates they result in very different outcomes.

Today we can look back on these myths and misconceptions and be satisfied that we have overcome most of them. Though, unbelievably, some still continue today, even within the past week I have had to respond to a local councillor who asked for a “definitive response” to the “scientific evidence or opinion” that he had that all Pinot Noir on the Peninsula would have to be pulled out in the next few years and be replanted with , which to me sounded more like a personal objective than a genuine enquiry.

Last year, in my report I addressed the myth surrounding the price and value of our wines. The analysis clearly demonstrated that Mornington’s average price for quality (per Halliday point) was significantly better than the rest of the market. Another myth busted!

Consistency of Mornington Peninsula wine quality?

This year I would like to deal with the myth that Mornington Peninsula wines lack consistency in quality. Maybe this criticism which we still hear from time to time is a hangover from the 1990s, a cool and wet decade and a time when there were many young vineyards and unresolved winemaking and viticultural techniques still being used. Still, how do we rate today?

Consistency of wine quality within a region can be looked at in two ways; consistency between vintages and consistency between producers. Time and resources limit the extent to which we can explore this, however, using our analysis of James Halliday’s Wine Companion over the past 3 years we can look at both of these aspects.

In terms of consistency between vintages, the following graphs show the average mean score for Mornington Pinot and Chardonnay over the past three years.

Pinot Noir - Mean Score 93.0

92.5

92.0

91.5

91.0

90.5

90.0

89.5

89.0

88.5

88.0 2007 2008 2009 Mornington Peninsula Tasmania Yarra Valley Geelong Adelaide Hills Gippsland Macedon Ranges

The 3 year average mean score for Mornington Peninsula Pinot Noir is the highest of any other region at 91.8 versus Macedon 91.2, Yarra Valley 91, Geelong 90.6 and Tasmania 90.5.

It is difficult to believe that the 2007 and 2008 vintages will rate less well relative to other regions. Anecdotally, it is likely they may rate better again. In relation to Chardonnay mean scores have been:

Chardonnay - Mean Score 93.0

92.0

91.0

90.0

89.0

88.0

87.0 2007 2008 2009

Mornington Peninsula Margaret River Yarra Valley Hunter Valley Adelaide Hills Tasmania McLaren Vale

The 3 year average mean score of 92.3 for Mornington Peninsula Chardonnay is the highest of any other region (Margaret River 91.8, Adelaide Hills 91.7, Yarra Valley 91.6 and Tasmania 90.4). There are longer term comparisons which may be able to be done in the future, but what is clear is that Mornington has been very consistent over these three vintages.

The next aspect to look at is consistency of quality of producers in the region and once again our region performs very well and very consistently as is illustrated below:

Pinot Noir - % Total Wines Rated 94-100 35%

30%

25%

20%

15%

10%

5%

0% 2007 2008 2009 Mornington Peninsula Tasmania Yarra Valley Geelong Adelaide Hills Gippsland Macedon Ranges

Chardonnay - % Total Wines Rated 94-100 20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0% 2007 2008 2009

Mornington Peninsula Margaret River Yarra Valley Hunter Valley Adelaide Hills Tasmania McLaren Vale

Of all the Pinot Noir wines rated in Australia over the last three years by James Halliday, 88 of the 282 that were rated as “Outstanding” (94 to 100 points) were from Mornington. That is, 31% versus the next best regions; the Yarra Valley at 21% and Tasmania at 19%. There were 733 Pinots rated above 90 points in this period and Mornington wines represented 25% of these, Yarra 20% and Tasmania 18%.

Incredibly, if a consumer bought a Mornington Peninsula Pinot Noir over the last years there was a 40% chance it was “Outstanding” (the average of the last 3 years is 37%). Likewise there was a 79% chance that it was rated above 90 points in the last year (77% over 3 years).

In relation to Chardonnay, of the 520 wines rated as “Outstanding” over the past 3 years, 87 were from Mornington (17%) just below Margaret River with 92 (18%) and ahead of the Yarra Valley with 81 (16%).

Again, incredibly, if a consumer was to buy a Mornington Chardonnay over the last 3 years there was a 49% chance that it was rated as “Outstanding”, the highest of any region with the next best being Margaret River at 41% and Yarra Valley at 33%. There was a 82% chance that it was rated over 90 points, higher than any other region.

The proportion of Pinot Noir and Chardonnay wines from Mornington Peninsula rated at greater than 90 points and greater than 94 points is higher than any other region. This has been the case in each of the past 3 years and also for the total of all wines rated over the past 3 years, with only one exception, Chardonnay in 2007 (second behind Margaret River).

The consistency of quality between producers and between vintages on Mornington Peninsula is the highest. Along with many others, lack of consistency is another myth busted.

Growing opportunities for sales

As quality continues to grow and as the Mornington Peninsula wine brand becomes more recognised domestically and around the world, so too, as we would expect, do the opportunities for sales growth. This is not only sales volume, but sales value as well. The limited sales and export data available confirms this is the case.

It is extremely difficult to find good data for sales at a regional or level. Domestic Pinot Noir sales, for instance, are not tracked by the leading sales information company; AC Nielsen. However, the AWBC have been very helpful in providing the following data: • Australian Pinot Noir exports have increased from 1,847,293 litres ($14,989,494 in value) in 2002 to 4,936,858 litres ($31,673,756 in value) in 2008. • The average price of Australian Pinot exported per litre in 2002 was $8.11 and $6.42 per litre in 2008, a decrease per litre of 20%.

However, during this time Mornington Peninsula wine exports did the following: • In 2002 MP exports were 79,362 litres ($1,059,292 in value) • In 2008 MP exported 159,992 litres ($2,575,701 in value) • The average price per litre of MP wine exported has increased from $13.35 in 2002 to $16.10 in 2008. An increase of 21% !

Domestic and export sales are growing for Mornington Peninsula wines and the average price of Mornington exports is growing, the opposite of what the rest of the market is experiencing. This is significant and should provide further encouragement for all producers to focus on quality and our regional flagship varieties Pinot Noir and Chardonnay.

Finally, according to the recent Deloitte Annual Financial Benchmarking Survey the average price per case of wine nationally for wineries in the $0 to $1m sales revenue category was $105.58 and $82.85 for those in the $1m to $5m category. For Mornington Peninsula the average case price in the lowest price channel, exports, is $145 per case.

Conclusion

What I hope I have been able to demonstrate is that our region is continuing to do very well relative to other regions and if we continue to focus on our strengths and our wine quality, opportunities will grow, our region will have a strong financial footing for the future and our outlook will be very bright.

Over 35 years we have overcome significant challenges as an industry, we now have the knowledge, skills, scale and recognition to cement Mornington Peninsula as one of the most exciting and respected wine regions in Australia. The MPVA has a central role in helping to build our regional brand and reputation and continuing the implementation of our five year Strategic Plan is critical to this.

Building on our successes, such as the Pinot Celebration and implementing new initiatives that will raise our profile requires a lot of work and effort. I encourage every member to help make a contribution to this.

The fact that we are able to attract wine industry leaders from around the world with the influence and reputation of Matt Kramer, Aubert de Villaine from Domaine de la Romanée-Conti and Jancis Robinson to our far flung corner of the world is testament to the respect and interest that has been created by what we are doing. We need to redouble our efforts to capitalise on this.

Many thanks to Cheryl Lee, our Executive Officer, and Sue at the MPVA office for all their efforts over the past year, we are very well served by our executive and despite the fluctuating level of support that they receive from their President and others at times, all our events and activities are still delivered professionally and seamlessly. Thank you also to all the Committee, our other office bearers and those that sit on our various sub committees for the many hours they have invested in our collective interests over the past year.

For further details regarding the activities and financial statements of the MPVA for the past year, please refer to the other reports attached from the Technical Committee, Secretary and Treasurer. You will have also received the Business Plan and Budget for the coming year during June which was approved at the meeting of Members on 4 July, 2008.

Finally, thanks once again to Chris Hamilton and also to Bronya at the TMBT office for helping to pull together all the Wine Companion data for this report. It has taken many hours, but again has provided us with some valuable insights.

I look forward to continuing to make a contribution to the MPVA where I can, albeit now from the sidelines. I hope you can forgive my indulgences over the past three years in writing such long and verbose reports, I trust that you have found something of interest in them. As you may have judged by now, I am very passionate and ambitious for our region and have great confidence in its future.

Good luck to all members for the vintage ahead and I hope to see you at the upcoming AGM.

Martin Spedding President, MPVA

References: 1. James Haliday – 2009 Australian Wine Companion 2. Australian Wine and Brandy Corporation Export Approval Database 3. Deloittes – Annual Financial Benchmarking Surveyfor the Australian Wine Industry, Vintage 2007. 4. WineBiz – Wine Industry Statistics 5. ABS - 8504.0 - Sales of Australian Wine and Brandy by Winemakers, Jun 2008 6. www.abare.gov.au 7. www.wineaustralia.com.au 8. Australian Society of Viticulture and Oenology 9. Grape and Wine Research and Development Corporation 10. winesofvictoria.com.au Secretary’s Report Sandro Mosele, Honorary Secretary

Membership

At 30 June 2008 membership of the association was 129. The makeup of the membership is as follows: Members 77 Associate Members 25 Professional Associates 20 Honorary Life 7

A warm welcome is extended to the following new members:

Members Associates James Redfern David Stephen Frank de Cicco Kevin Keele Keith Murton Arthur Parsons Dan Prior

Communication with Members The MPVA e-newsletter is sent weekly and when required and is saving enormous amounts of time and significant costs to the Association. The MPVA Website members Section has been further developed and is updated regularly as well as archiving all e-newsletters sent. It is good to see more and more members utilising the members website

Major MPVA Promotional Events

• Pinots Week 23 February – 9 March 2008

• Peninsula Piers and Pinot 9 March 2008

• Winter Wine Weekend 7 – 9 June 2008

• Mornington Peninsula Wine Touring Map 2008

Members Barbeques and events 19 October 2007 AWRI Seminar held at Five Sons 26 October 2007 Pinot Benchmarking Project final tasting at Jones Road Cellar Door 10 January 2008 Pre Harvest Workshop held at Willow Creek Vineyard 30 May 2008 End of Season Roundup followed by Members BBQ at Paradigm Hill 4 July 2008 Budget Meeting held at Morning Sun Vineyard

Special Thanks The Association is sincerely grateful for the assistance of many who have given their time and expertise so freely, and in particular Stephen Stern (Honorary Solicitor) and the Friends of the MPVA

Technical Report Tyson Lewis, Technical Committee Chairman

The Technical Committee meets on a monthly basis throughout the year and continues to involve vineyard managers, viticulturalists, winemakers and industry personnel. This group draws on a wide knowledge base and can seek relevant professional contacts as needs are identified by the Technical Committee, the MPVA members or the Executive Committee. The Technical Committee continued the “Vineyard Reminders” program which highlights significant issues each season in MPVA Newsletters works towards continual improvements in grape and wine quality. Indications have been that this has been well received by members.

The MPVA Technical Committee has continued to meet with the Yarra Valley Grape Growers Technical Committee twice during the year initiating much discussion on the industry direction and what we provide to our members. Phylloxera and related issues remain high on the agenda and a number of workshop initiatives have been jointly undertaken.

The Phylloxera Sub Committee has continued to revise and re-iterate protocols and has been instrumental in the commencement of voting for the regional survey and eventual Phylloxera Exclusion Zone classification. The Technical Committee sees this move as proactive to ensuring the long term biosecurity and viability of our region. The phylloxera sub-committee continues to meet, monitor needs and reinforce the uptake of protocols.

The water quality project extension of last season has been continued this season to further record sampling of our waterways and invertebrate numbers and diversity as direct indicators of water quality. Further study into specific salinity issues are planned for the coming season. In addition RMIT University has involved a PHD student in conducting a study of salt and metal loads and interactions in the regions soils. This shall be undertaken over three years and is expected to have detailed findings with relevance to viticulture.

The end of season review was held once again with interesting weather data and anecdotal comment on the season that was.

The Technical Committee has also been discussing the regions sustainable viticulture initiatives. With more biodynamic and alternative methods in combating disease and weeds being offered the committee has continued to discuss new products and machinery as they are tried in the field. Possibility for a workshop in this area in the future.

A well attended forum on rootstock use and selection was recently held at Stoniers and was well received. Presenters Nick Dry and Nigel Bleishki discussed available rootstocks, attributes and suitability. This was an extremely informative and practical session and a rootstock trial on the Mornington Peninsula may well be a product of the day.

A further sub-committee has been working on understanding our carbon footprint in the vineyard and winery with the view to running a workshop for members to assess their current use and monitoring and initiatives that may be undertaken to save costs.