McGuigan: ‘Brexit was a slap in the face’

The UK’s decision to leave the EU was “a slap in the face” but it doesn’t lessen Britain’s importance as a key wine market according to Australian producer Neil McGuigan.

Neil McGuigan remains committed to the UK market

Speaking to the drinks business during a visit to London, McGuigan said: “Brexit was a slap in the face and caused us a lot of stress due to the devaluation of the pound but you’ve got to get on with it.

“There are a lot of issues at the moment with wine brands coming into the UK from around the world but the longterm outcome could be positive if Australia negotiates a good free trade agreement with the UK, which could accelerate the change of a shift of emphasis from the Old World to the New World.

“The Wine and Spirits Trade Association is working with Wine Australia to figure out a game plan now so that we’re ready when Article 50 is triggered. We’re in the UK for the longterm and we need to weather the storm and come out the other side by building our distribution footprint.

“Our dance card isn’t full yet in the UK – we’ve still got a lot of work to do. The uncertainty at the moment is creating the problem. I think the markets will settle down when article 50 is activated.”

Julian Dyer, Australian Vintage’s general manager for the UK & Europe, stressed that despite Brexit woes, the UK remains a key market for the company.

“The devaluation of the pound doesn’t change our strategy in the UK – we’re a growing brand and we want to continue to grow our distribution.

“We’re going to continue to work hard and invest in the UK market. We can’t underestimate the impact of Brexit, it affects everyone as no one makes a lot of money selling wine in the UK as it is, so it will be a big challenge for us moving forward,” he admitted.

In the meantime, McGuigan revealed a desire to “get excitement going in other markets to create a natural hedge”.

“There will always be some markets around the world whose economy is in the toilet but we’re not taking our foot off the accelerator – we need to keep the momentum going,” he said.

McGuigan Malbec is going great guns in the UK

“We’re close to signing a contract with a major distributor in the US to start selling our Tempus Two brand there early next year with McGuigan to follow later in the year. We need to establish Australia as an exciting country as we’ve lost a bit of our gloss there over the years due to a lot of Australian wine companies pulling out of the US.

“Australia hasn’t worked the US market well enough, we need to go to them and show them how good Australian wine is. We did a good job in the ‘80s but dropped the ball in the ‘90s.

“The problem isn’t with the consumers, it’s with the gatekeepers – we need to show them what we can do at different price points.

“We haven’t put the winemaking personalities out there enough with their brands in the US. America will be needing us soon as they’re going to run out of wine, land and water due to a rise in domestic consumption,” he added.

Among the company’s recent innovations is a Malbec from Sunraysia, which is going great guns. “We’re on the Malbec train with a fruit forward, open, generous style that is more approachable than Argentine Malbec and with softer tannins.

“People are replanting Malbec in Australia as there is a lot of excitement around the variety. We were missing a trick and wanted to take on our Argentine friends at their own game,” McGuigan said.

He admitted that the company “still hasn’t nailed sparkling wine yet” and launched with a frizzante over a spumante as he thought “softer bubbles were safer”.

McGuigan is planning on releasing a small production traditional method McGuigan branded sparkling wine in the next few years to take advantage of the growing global thirst for sparkling wine.

As for China, he believes it’s a market with “huge potential” but that properly penetrating it will take “a generation at least”.

“Things have really started to change in the last 18 months – they still don’t get it but they will. We’re working with Cofco in China with our Black Label Red – a Shiraz dominant blend, which is doing really well out there,” McGuigan told db.

“We’re running with the pointed edge of the lance out there and the wine is perfect for the Asian palate as it’s rich, soft and approachable,” he added.

With regards to millennials, McGuigan feels it’s a mistake to market brands to them too overtly. “What they’re interested in is the authenticity of the brand and the story it has to tell,” he said.

“We’ve spent too long looking at cost and the route to market expecting people to know everything about us. We need to step up our game or the craft beer and spirits brands will continue to do it better than wine brands. We need to talk quality and get the emperor’s clothes back,” Dyer added.