Perils of a parallel universe

Importing loopholes are delivering bargains for premium champagne, but at what cost?

There are some spectacular online champagne deals at the moment, especially from the big supermarket retailers, but are they really good news? Ten days ago, Vintage Cellars advertised Bollinger Special Cuvee non-vintage at $56.99 (''Save $27''), plus delivery charges.

''That's $10 less than I can buy it on my staff account,'' says Robert Hirst, the chairman of the official importer of Bollinger, Fine Wine Partners. Hirst's family has been importing Bollinger for more than 100 years and he's upset at what he sees as the trashing of the brand.

How can a retailer sell a wine cheaper than the importer can buy it for himself?

It's called parallel importing, and the phenomenon is shaking the champagne industry to its core.

Paralleling is when someone - in this case, a retailer - acquires wine internationally from a supplier other than the usual distributor and imports it without using middlemen. The wine may have been surplus stock from a regular importer who over-ordered. In markets such as Britain where champagne sales are slipping, there is plenty available. And those who have it are happy to off-load it cheaply.

In some cases, the wine, perhaps a container load (1000 cases), may have been to more than one country before Australia; shipped in unrefrigerated containers; placed on a ship in damaging heat; sat on the dock, or in a warehouse, in the tropics. Who knows where it's been. Grant Ramage, the general manager of Vintage Cellars, a division of Coles Liquor, doesn't know where the paralleled champagne he sells has travelled before it comes into Coles's possession.

''We know parallel-imported Bollinger has been sourced from all over Europe, but mainly the UK, France, Italy and Holland,'' Hirst says. ''There is a dramatic difference between the cost of shipping wine in a refrigerated container compared to non-refrigerated. And a non-refrigerated container could have been sitting on the deck of a ship, across the equator and all the way from Europe.''

Hirst says the normal bottleshop price of a bottle of Bollinger is $70-$90. The lower price would be retailers ''making just 10 per cent on it''. The normal margin is 30 per cent to 40 per cent.

However, the discounted price becomes the price people expect to pay, and they get annoyed when asked to pay more.


''Independent retailers can't compete,'' Hirst says. ''They don't want their customers coming in and telling them, 'You're ripping me off!' In the end, you end up with just two customers [Coles and Woolworths] selling your product … They destroy the brand so it no longer generates profit, then they drop it and move on to the next thing.''

Vintage Cellars has been promoting a series of heavily discounted champagnes. There was Laurent-Perrier Rose´ NV at $99.99 a bottle (a saving of $130, according to the ad). Then there was ''half price'' Taittinger Brut Reserve non-vintage at $47.49. This was compared with a ''normal'' retail price of $95.

Ramage says the Laurent-Perrier Rose´ was parallel-imported stock, but he was unsure of the Taittinger. He could not say where the Laurent-Perrier had been on its way to Australia. It could have been re-exported from another country. All these deals are online, so you and I cannot walk into a Vintage Cellars store and buy one bottle to try before committing to more. Nor can we see a bottle in order to check the importer's name.

According to Ramage, champagne has traditionally been overpriced in the Australian market. ''It used to be thought that - well - we're a long way from Europe … But now it's a global market. There is more visibility, more transparency,'' he says.

People travel more and they can use the internet to find out what price wines sell for in other countries. ''We were forced to take a different position to traditional importing,'' he says.

Ramage says Coles has been parallel importing champagne for six or seven years, and it's a significant part of the market.

Champagne was targeted because it is a high-profile, high-priced, profitable item with high brand recognition. Today, the market is highly competitive and the exchange rate is in Australia's favour. ''Parallel importing is the reason why champagne sales have increased in recent years,'' he says.

As well, Coles Liquor has several exclusive brands, including Cattier, Moutard and Dumangin, which may not be household names but they are relatively cheap and sell on price and the champagne name. ''More Australians now have champagne in the fridge, and they no longer feel they have to wait for a special occasion to pop a cork,'' Ramage says. ''We're giving consumers fantastic value for money.''

Ramage is confident of the wine's quality: he and his staff taste the wines regularly and compare them, he says, and he offered to send samples for me to taste. Despite a reminder after a fortnight, the samples have not arrived.

''Other importers have predictably used this [doubts about its freshness] as a way to question its quality,'' he says. ''But over the last seven years we have had no issues with quality, and had no complaints.''

Tastings by Huon Hooke


Oddball grape varieties are all the rage, the interest spurred by a growing fascination with obscure imported wines such as Petalos. Mencia is the latest. Mencia vine material is now available at the Yalumba nursery in South Australia, and the winemaker at Oliver's Taranga Vineyards in McLaren Vale, Corrina Wright, claims to be the first in Australia to plant some. ''We have a couple of rows planted so far, and are aiming to have a three-acre [1.2-hectare] patch in the next couple of years,'' she says. ''We decided to have a go at it because even though we don't have the altitude of Bierzo [the Spanish region associated with mencia], we do have the iron-rich soils … We love the mencias that we have been able to access so far. They seem to be like a cross between shiraz and pinot noir in simple terms.'' It's likely to be a few years before we can taste them. Oliver's already produces the Italian varietals sagrantino and fiano.


The chief winemaker at Penfolds, Peter Gago, has received the 2012 Winemakers' Winemaker Award. This new award, presented by the Institute of Masters of Wine and international trade publication The Drinks Business, is given for ''outstanding achievement in the field of winemaking''. It was first awarded last year to Peter Sisseck of Dominio de Pingus in Spain. Gago celebrates his 10th year as Penfolds' chief winemaker this year and, in his 23 years with the brand, he has overseen the creation of several new Penfolds wines including the Cellar Reserve range and the release of specials such as 2008 Bin 620 Cabernet Shiraz, 2004 Block 42 Cabernet Sauvignon and 2004 Bin 60A Cabernet Shiraz. He is the custodian of Grange and only the fourth chief winemaker in Penfolds' history, following Max Schubert, Don Ditter and John Duval.


The head sommelier at Otto Ristorante, Patrick White, has been busy stomping grapes, producing a red wine for sale in the restaurant only. Named Nostrano, derived from ''il nostro'' meaning ''ours'' in Italian, it is a blend of sangiovese and shiraz, made from grapes grown in Western Australia's Geographe region. A 2011 vintage of 13.5 per cent alcohol, it is one of a new wave of wines, putting a proportion of whole bunches, including the stalks, in the fermentation. The result is a very complex wine with foresty, spicy and red-fruit aroma and flavour, as well as tannins that are remarkably soft for such a young wine. It's light-bodied and deliciously drinkable and would go well with many foods. It sells for $65 a bottle or $13 a glass.


It's official - Rathbone Wine Group, which includes Yering Station (Yarra Valley), Mount Langi Ghiran (Grampians), Parker Coonawarra Estate and Xanadu (Margaret River) is for sale, as a group or individually. This is unfortunate for the wine industry because the group, owned by the Rathbone family, has been an outstanding proprietor and a wine industry leader. It's always pursued the highest quality. It's behaved responsibly in both the marketing and making of its wines. It revitalised Xanadu and took Mount Langi Ghiran to the next level. At Yering Station, the Rathbones began with very little except a brand, creating a portfolio of fine wines, building a showpiece winery with restaurant and grounds, and becoming a leader in the region.

This article Perils of a parallel universe was originally published in The Sydney Morning Herald.