Prosecco proud! Wine industry bubbling along in NE Victoria
Posted October 27, 2017
The wine industry is a huge part of North East Victorian economy and lifestyle, and the King Valley has become the Australian home of prosecco. Cathy recognised the business and tourism vision and value of local wineries, particularly Brown Brothers, in Parliament.
Ms McGOWAN (Indi) (19:04): I'm very pleased to rise here this evening to support the Australian Grape and Wine Authority Amendment (Wine Australia) Bill 2017, which will make amendments to the Australian Grape and Wine Authority Act 2013. In support of this legislation, I want to address three points. I want to highlight the importance of wine and tourism industries in my electorate and in other members' electorates. I want to acknowledge the role of Brown Brothers as a clear example of what it means to be a successful regionally based business. I also want to recognise the opportunity for my region in becoming the Australian home of prosecco and the role the Australian government can play in this opportunity.
We've covered well in this debate the amendments and how important they are, and how they will allow the Australian Grape and Wine Authority to facilitate and administer programs for cider and in relation to international wine tourism, to administer grant programs in relation to wine and to formally change the name of the authority. So it's an important piece of legislation, particularly for my electorate of Indi—and I'm absolutely delighted to acknowledge two of my constituents here tonight; I reckon you understand the wine industry and how important it is. For those of you in the chamber who don't know Indi, which is in north-east Victoria, viticulture and tourism are two of our biggest industries. Of the 21 official wine regions in Victoria, six are in my electorate. We're well endowed with beautiful country and glorious wine.
In addition to producing high-quality wine, these vineyards provide high-quality vineyard dining, behind-the-scenes tours and cellar door experiences, and they're a major attracter—in the Murray Valley, the Mitta Valley, the King Valley, the Ovens Valley and then further down south in Broken Valley and around the Upper Goulburn area. We have beautiful fertile soil, mountains, and hills and these fantastic businesses that produce beautiful wine and glorious places to have lunch, but also tourism. Central to the whole wine industry—its agriculture and manufacturing—is that the food and wine, cider and beer visitors spend an estimated $142 million in my electorate. That's tourism.
Central to this whole success story are Brown Brothers. I think many of you would know and appreciate Brown Brothers wine. Brown Brothers are located in Milawa, which is just to the east of Wangaratta, in the King Valley. They're a third- and fourth-generation regional business, which is fantastic. Founded in 1889, Brown Brothers employ 320 people, of whom 200 are located regionally. They've developed a terrific export market that turns over $110 million. They are hugely important for my region.
Brown Brothers cover the full spectrum of what it means to be a successful regionally based business. They've got a base. Their agricultural product starts in the vineyards. They move to manufacturing through their winemaking, their bottling and their packaging. They do research. They market their product and then they trade domestically and internationally, resulting in a frontline and executive staff across a really broad range of disciplines. So, it is fantastic working with Brown Brothers, because you've always got a good career path. One of their key tourism and marketing initiatives is their cellar door, not only at their home in Milawa, which is really important, but also at their Devil's Corner and Tamar Ridge wineries in north-east of Tasmania—and I have to acknowledge the member for Lyons, Brian Mitchell, and his electorate—and the Innocent Bystander brand in the Yarra Valley, in the electorate of the member for Casey, Tony Smith. In total, they draw more than 400,000 visitors to their cellar doors. That's 400,000 people visiting our regions. To quote Ross Brown, every bottle of wine exported is equivalent to an Australian postcard inviting visitors to come to regional Australia.
So, it's a terrific industry for us. While Brown Brothers are a very clear example of how the Australian wine industry drives tourism, creates regional employment and generates sales of lifestyle products in Australia and overseas, they don't do it in isolation. I want to share some of the thoughts of Ross Brown, executive director of Brown Brothers. A couple of weeks ago he appeared at an inquiry of one of the committees I'm part of, into regional development. The committee came and heard evidence in Wodonga, and Ross gave evidence. He said:
It's very interesting to think about why the tourist goes to an area. I've spent a lot of time on tourism bodies over the year, and I've coined a one-liner called 'co-opetition'. The concept of bringing people to a region is not about coming to Brown Brothers to buy wine. Twenty years ago, that occurred. People would come to Milawa to buy wine. They go to Dan Murphy's now. Consequently, the offer has to be a regional offer. That means the whole of the region has to be cooperating collectively. When they get into the region, the co-opetition is to build a bigger pie. If you've got a bigger pie and a bit more to go around, we'll be absolutely relentless in making sure we get—
That's Brown Brothers—
the biggest share of that pie. But if the pie is small, nobody gets very much. Collectively we have to create a destination for tourists by bringing the best opportunities of all the tourist aspects together, and that means people make a choice where they'll go. They don't go to a region for a single property or a single occasion. They really want a very large generous offer of lots of things coming together, such as the cycling—
To which I would add scenery, wine, food—
We're seeing in north-east Victoria that this is changing the whole demographic of the visitors to this region.
I know fashions come and go in the wine industry. If you're not aware of it, the eighties was a time of people drinking red wine; the nineties was a chardonnay era; and for the last 20 years it's been sauvignon blanc, mostly from New Zealand, which, sadly, has meant that 40 per cent of the white wine consumed in Australia at the moment comes from New Zealand. But I'm told—you heard it here first, members of parliament—that the next wine fashion is prosecco. Prosecco is a wine grape variety that came from Italy 20 years ago to the King Valley. Since then the King Valley has become the home of prosecco in Australia. The prosecco market is booming domestically and internationally, and it's supported by millions of dollars of production and marketing investment by Australian wine producers and grape-growers. Currently the Australian prosecco market in total is $60 million, and the King Valley has about $25 million of that production. There's an opportunity for the category to grow to $400 million in the foreseeable future. We believe the King Valley could have $200 million of that—certainly growing our pie. Over the last 12 months the Australian crush of prosecco grapes increased by 78 per cent. It has tripled since 2015. Similarly, Australian prosecco exports by value grew 77 per cent in the last year and have quadrupled in the last three years. So, truly, we're on to something. While only six per cent of the sparkling wine drunk in Australia is prosecco, evidence from the United Kingdom tells us that this is set to change. Historically, sparkling wine in the United Kingdom has been dominated by French, but it's now dominated by the Italians. Fifty-six per cent of all sparkling wine drunk in the UK is prosecco.
So, where does that get us? It is an opportunity and a gap. Mr Ross Brown has told the regional development committee:
Therein lies the opportunity and the problem, because the growers in the King Valley are totally focused on getting grapes in the ground and getting production, which they're also very good at. But at the end of the day, the success will be about marketing and taking this wine to market. Therefore, there's going to be a financial gap between opportunity and capability because the producers in the King Valley have done it very tough. They are short of capital and all that capital's going into production. In the future there needs to be the capacity to invest in the marketing.
There are all sorts of opportunities that Brown Brothers and others are addressing. I want to talk a little about how growers of prosecco are working together in my community, individual small businesses, and have developed the concept of the Prosecco Road, which is actually King Valley road. It's gorgeous. So we have Brown Brothers in Milawa, the Dal Zotto and Pizzini families in Whitfield, All Saints in Rutherglen, Chrismont in Cheshunt and Sam Miranda in Oxley. They've all joined together to get this Prosecco Road idea going.
But there is a real fear that the use of the name 'prosecco' could be compromised by commercial demands of the Italians. They don't want us to use the name 'prosecco'. They think it's theirs. So over this last week, collectively, the wine-growers of north-east Victoria have been in parliament, talking across the political divide and lobbying to ensure that free trade negotiations don't, in the immediate sense, act as a threat to export arrangements to China and Asia broadly; in the mid term, limit the potential of adding $500 million to the Australian wine industry; and in the long term, there is a risk of huge loss and industry disruption that will be felt by many of our regional communities.
In summary, it is a fantastic change that has happened here with the WET, this investment and the amendment tonight. But what has worked so well is that industry has worked with government. We've had the minister, Senator Rushton, doing a fantastic job in bringing everybody to the table, getting all the negotiations happening and working with Treasury and Finance. That has been really good. Now we've got a huge opportunity to grow a particular type of wine in our regions. Again, I'm calling on the government to provide that same sort of leadership to help us do the trade negotiations, manage the WTO and the geographic indicator problem that has been presented and get the investment in the region so that we can do the marketing that we need to do. If we get all that lined up then we get regional development, we get jobs, we get value-adding like the cycle paths and summer tourism to the mountains and we get a fantastic tourist, agricultural and manufacturing package that is sustainable in the long term. We have got a superb opportunity here.
I would like to acknowledge the leaders of the wine industry in my community and say what great respect I have for your vision, for your really hard work, for working together as a team, for understanding the politics, coming to Canberra and for being ahead of the issue. I thank my community very, very much for that work. It gives me great pleasure to give this talk in parliament, because I think we are ideally placed now to do the work that needs to be done. We've got the leadership with the government onside. We've got the leadership in industry. We've got the vision. We know that we've got the product that is going to give us economic opportunities. I know from other members of parliament that we like Prosecco. It's a lovely drink and we want to drink more of it.
In closing, I say to the government: the key to ensuring the negotiations that my industry want to do, with optimal results for our wine industry, is strong leadership and a commitment from the government to genuinely engage with industry. We know it is something that the government can do and Anne Rushton, in particular, has demonstrated that it can do it really well. I thank her for her work and her staff for their work with the wine equalisation tax and with the amendment. I look forward to working with the government but, in particular, I look forward to the networking job of bringing my industry together with government and working on opening up trade opportunities.
Thank you, Mr Deputy Speaker Coulton, for your interest. There is an invitation for you to come to north-east Victoria. I don't think you've been there recently, and we would love to show you around and introduce you to King Valley and the beautiful cool-climate wines that are growing out of there. We'll put you on a pushbike and let you do a bit of adventure holidaying. Thank you very much, and I appreciate the opportunity to make this contribution.