McGuigan planting ‘as much Malbec’ as possible

McGuigan is betting on the future of Australian Malbec believing it could be the next big variety out of Australia, with chief winemaker Neil McGuigan revealing that the producer is working to plant as much of the variety as possible.

Winemaker Neil McGuigan with TV chef John Torode

McGuigan added its first single variety Malbec to its Black Label range last year, which McGuigan said had been a “phenomenal success”, speaking to the drinks business, so much so that he is now eyeing up more vineyards to plant Malbec.

“Malbec I am planting as much as I can,” said McGuigan. “Over the next two years we will be planting another 30 hectares, but it’s not enough. We are totally committed to Malbec. We are not just planting in one region but a couple of regions, all different terroirs, Australia can produce a very friendly, approachable style. It’s just been a phenomenal success.”

Currently McGuigan has 35 hectares of Malbec planted across Sunraysia, Barossa and the Limestone Coast.

“The other thing that we are working on is a Tempranillo, so we are not idle, we have lots of things happening,” said McGuigan. “We are focusing on the things we do well but we need to keep excitement going in our business all the time or it will become ho-hum and we will have our friends from the cider and beer industry taking over the market.”

While McGuigan is forging ahead with new plantings and continuing to invest in the UK, McGuigan is realistic as to the challenges posed by Brexit.

McGuigan launched its first Australian single variety Malbec last year

“Brexit was very difficult and is difficult for Australian wine producers, because the devaluation of the sterling makes it hard to make money, but that will change. Our company has incredible momentum and we are not going to pull back. In fact we are investing in the UK because it will recover and the UK market will be strong. We need to extend our sales footprint throughout this country so that when it does change we are in the right position to have our wines in the right areas.”

McGuigan issued two profit warning last year warning investors that it was expecting to make less than half of its expected income due to the devaluation of the pound post Brexit.

“We thought that we were going to make AU$8 million and we have told the market we will make $4m, and that was due to Brexit,” said McGuigan. “That was a concern to us but what can you do? Put your head in the sand and say it’s all too hard and don’t spend any money? You have to take a long term view. We are are confident about this market. We have to continue to invest. We have fantastic momentum. Our brand is growing very well and we want to keep that going. We are continuing to do the things that we were planning to do. You just have to get on.”

As with many Australian producers, McGuigan is looking at ways build value into its brand, with Australia still suffering from the hangover of supermarket deep-discounting. Putting a greater focus on regionality is one way that producers are encouraging consumers to trade up.

“The UK wine market, in the last 10 years, I believe alcohol volumes are down by around 10%, so the only way to grow is by nicking share from competitors or premiumisation and trading up,” said McGuigan.

In McGuigan’s case, the brand carries its Handmade, Shortlist and flagship The Philosophy wines, alongside its most recent Founders range or four regional-specific wines at £10 a wine that better highlight their origin.

“If I had released these wines five years ago you would have said you won’t sell any of it, but we are going to run out. People want to take the next step,” said McGuigan, before adding: “We have to give people a reason to trade up and I do sense a change in the industry,” he said. “But also with the big retailers starting to increase the ranges above £6, 7, 8, 9, and giving Australia the headspace, the room to breath. It won’t change overnight. We are still a volume dominated market but there are signs to allow Australia access to areas that we have not traditionally been present in.”