The State Of Australia’s Wine Industry: An Interview With Rathbone Wine Group

It may seem to many enophiles that Australian premium wines stormed into the international market in the late 20^thcentury with little history or tradition to back them up. But, in fact, the first wine grapes were planted Down Under in 1788 (the same time Thomas Jefferson was planting vinifera in Virginia), and by 1820 commercial winemaking had begun. Still, as recently as the late 1980s, sixty percent of Australia’s output was being exported in cask or bag-in-the box wines. Yet today, as Hugh Johnson has written in his Pocket Wine Book 2022, “Australian wine has become the broadest of churches, as likely to be found in the fine dining tables for the world as it is in the supermarket.”

The Rathbone Wine Group was among the most forward-looking when it was established in 1996 in Melbourne, owned by the Rathbone family, with Darren Rathbone (CEO & Group Winemaker), Doug Rathbone (Chairman) and Brad Rathbone (Export Director).

Today it has vineyards by the name Yering Station, Mount Langi Ghiran and Xanadu, while Château Yering is a multi-regional wine label. Several of its wines have consistently won both Australian and international event awards.

I sat down with Darren Rathbone for dinner and conversation while he was in New York. Trained as a chemical engineer, he early on realized his place was in the family vineyards, going off to UC Davis to gain a master’s degree in enology and working for California wineries like Spottswoode and Etude and in France at Chateau Lynch-Bages and Domaine Moreau Bernard & Fils.

Your family’s first purchase was Yerin Station. Was that just the land or was it growing grapes? What did you like about the terroir there?

The first property we purchased was Laura Barnes (named after my Great Grandmother, the first of the Rathbone family; she married a Rathbone in order to emmigrate from England). It was a tomato farm when we bought it and we planted it to grapes. A few months later Yering Station came up for sale. We planted about 20 acres of vines in 1987. In March 1996, and planted out the rest of the property to 160 acres.

And you now have a restaurant there open to the public?

We developed the restaurant as part of the building of the new winery. The restaurant opened in 1999 and has been going well ever since, serving modern food focused on a fresh match to our wines. Yering Station today is a fantastic tourist destination, with our impressive cellar door restaurant set in a historic 1850s winery building and beautiful gardens. Xanadu also has an exciting restaurant and cellar door which is a wonderful tourist destination. Mount Langi Ghiran is a little more isolated and so gets a lot less visitors, but it is a beautiful place to visit, with a great cellar door and a cafe. During Covid, with boarders shut, we saw a big influx of local tourists, Australians getting out to visit their regions. Now with boarders opening up, we are thankful to see international visitors returning.

Xanadu seems to be your flagship at this point. Why?

No, I would not say Xanadu is the flagship. Each of the brands is focused on representing high quality examples of their region, and within each brand there are flagship wines, such as the Yering Station “Scarlett” Pinot Noir or the “Langi” Shiraz along with the Xanadu Reserves and Yering Reserves.

How do you craft your Chardonnays?

We really want the flavors that are developed in the vineyard to shine through in the wines. We do whole bunch pressing to give a free run juice that is then run to barrel for a wild fermentation in French oak, although, depending on the batch, predominately older oak. Once the fermentation is finished the wines are sulfured and moved to a cold cellar to prevent malolactic fermentation, preserving the acidity and the flavor of the grapes. Lees stirring of bâtonage is used to build texture in the wines, as they age for approximated 10 months in barrel before being filtered and bottled.

In what ways is the Margaret River climate similar to the Mediterranean’s?

Magaret River is surrounded by ocean on three sides, and the cooling and moderating effect of the ocean helps slow the ripening of the grapes, giving more time to develop on the vine, which in turn leads to deeper more complex flavours.

You say that “Our philosophy is to guide the wines through to the bottle, rather than ‘beating them into submission’.” Without naming names, how do some wineries beat their wines into submission? How does your technique differ?

We spend a great deal of effort in the vineyard to grow grapes with the best flavors we possibly can. We want to make sure those flavors are carried through into the bottle. First, we want to pick the grapes when they taste great and are not overripe, which can result in big “jammy” wines. We want to ferment the wines at a moderate temperature, allowing for longer fermentations without over extracting too much tannin. Barrels are used to provide supporting flavor and structure but not overpower the wines. The consumer should taste the flavors from the grapes first and the winemaking second.

How has climate change affected Australia’s wine industry generally and your estates specifically.

The weather is in a state of flux, and as such is becoming less and less predictable. We need to work with the seasons, monitoring both the long and short term conditions into consideration. At a national level, in 2020 Australia saw disastrous fires across the country, in 2022 there are significant floods. We have seen a compression of harvest times, where vintages use to go for 10 weeks, starting with Chardonnay and finishing with Cabernet. Now it is not uncommon for everything to be picked in 6 or 7 weeks. (That said, the 2021 vintage did seem to go for a longer period of time again.) We are also seeing difference in the timing, amount and intensity of rain. As big summer storm systems become more frequent in Northern Australia, they tend to throw more summer rain across the southern areas of Australia. Tools for carefully applied irrigation, such as giving the vineyards a good amount of water before a heat wave or holding off on irrigation in milder, wetter seasons, are more important than ever. We work with composting and mulching to retain water in the soil. We look at different companion plants to plant in the mid rows that can help with water management.

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The year 2020 was kind of a double whammy for Australian wines: First, you were hit with drought and wildfires, then China, which was the number one importer, slammed prohibitive tariffs on wines. Can you explain the results of both?

The wildfires were devastating, the worst the country has seen. Thankfully for our three brands, we were not in areas that were affected by the fires, but lots of Australian wine producers lots their entire years’ crop or worse, and had their properties and vineyards destroyed. The 200% Tariff the China has placed on Australian wine has definitely been a big hit to our industry. The story of Australian wine in China had been a huge success story, in that the market opened up, and Australia worked hard to understand what the Chinese wanted and developed a product that fitted that demand. It is a shame that it got cut off. It is a specific part of the Australian production that was popular in China, predominately big red wines. White wines, Pinot Noirs and other more elegant reds were not affected. For Rathbone Wine Group, it was about 10% of our total sales going to China. For some Australian producers, it was a lot worse.

Why did China establish those tariffs?

The official reason was that The Australian Government had been subsidizing the Australian Wine Industry and that Australia was dumping wine into the Chinese market at very low prices. Neither claim was accurate, but that is going to be something for the WTO to decide. I am not an expert in international relations, but it does seem to me to be more about a fractured relationship between the Chinese Government and the Australian Government than it does with anything that actually had to do with what the Australian Wine Industry was doing.

What are the percentages of your wines that stay in Australia and are exported. Is the U.S. one of your biggest markets?

Australia is our biggest market. We have been exporting to North America, The UK, Europe and many countries in Asia for around 20 to 25 years, depending on the market. Australia’s success has gone up and down in different markets in all kinds of different ways. Fifteen years ago, Australia was very successful in the USA, but gradually that shifted away from the premium brands and towards high volume commercial brands. I think there is a real opportunity in the North America at the moment for Australia to refocus on its super premium regional wines and celebrate the diversity of Australian wine. Covid did play a part in shifting our performance in various markets. There was a very strong shift away from the on-premises market, when many restaurants had to close, and towards retail and online sales. Our wines have traditionally had an on-premises focus. Redirecting to retail channels was easier to achieve for us in the Australian market than in export markets.

As such, our sales today are about 70% in Australia, with the UK our strongest export market and the USA and Canada not far behind.

With a current global glut of wine and worries about a downtown in world economies, what do you think your growth and marketing will be over the next two to five years?

It is definitely a competitive industry, although in many parts of the world for various reasons crops have been relatively low, so right now I am not sure that there is an oversupply of wine. We are definitely seeing grow in the market in cooler climate styles, like we are making at Yering Station, Mountain Langi Ghiran and Xanadu. Wines with more elegance and depth of complex flavors. There seems to be a trend with wine drinkers to spend about the same value but drink less volume, so they are drinking better quality, which is the consumer we are engaging with.

Have you other expansion plans in mind?

At the moment the focus is on building back our export markets. There is so much opportunity here, and consumers are responding well to our wines when they taste them.

Since South African wineries went in the direction of distinctive varietals, even a locally grown white like Therona. Yet Australia decided to compete against traditional European varieties like Chardonnay, Cabernet Sauvignon and Pinot Noir. Why?

People have been growing grapes in Australia for over 200 years. The first European settlers in Australia started planting the varieties that they were familiar with and enjoyed consuming, which were the French varieties, Cabernet, Chardonnay, Shiraz, Pinot Noir. Over this time, we have been able to find excellent locations to grow these varieties across Australia, producing amazing wines, that consumers have responded well to. Many people in Australia are broadening that selection, with increased plantings of Italian and Spanish varieties, or more exotic varieties from Eastern Europe. These are interesting but still a relative minority. I’m not sure why South Africa has gone down the path of developing its own varieties, such as Pinotage, but it has not been something the Australian industry has felt a need to do. From what I am aware of, both North and South American wine industries have followed the planting of European varieties.