Something from Drinks Business for financial tipsters to think about: “it seems inevitable that the shipping of bulk wine and bottling in the market of consumption will once again become the preferred method for economic, environmental and quality reasons.”  Already two out of every three bottles of Aussie liquid sunshine sold in Blighty are bottled there.  And the reason is simple – bottling in the UK halves shipping costs.  So time to short Consol Glass shares, I would have thought.

For South Africa, which sells in the UK at even lower price points than Australia, the argument is even more compelling.  Drinks Business supplies a convincing list of benefits to bottling close to the point of sale:

• Bulk wine is less prone to large temperature variations due to a greater thermal inertia and thus reduces risk of premature ageing;

• Large temperature fluctuations can compromise integrity of wine bottle closures, and therefore wine quality;

• Bottling in export market defers the start of the shelf life;

• Packaging closer to final market gives more flexibility to change packaging formats in response to market demand and to react to short-term promotional campaigns;

• In the UK, bulk shipping will address the imbalance between the volume of green glass produced and the volume of recycled green glass;

• Bulk shipping greatly reduces environmental emissions, each flexitank shipped from Australia and bottled in the UK reduces CO2 emissions by 20 tonnes.

But DB is curiously silent about two elephants in the bottling plant.  A producer at Classic Wine’s Chenin Top Ten, recently returned from the Netherlands, reports that SA bulk wine is being adulterated with cheaper East European juice in the Dutch market.  Indeed last year, a high profile SA wine exporter to China found a substantial number of bottles of his own wine that he did not produce, on sale in the Middle Kingdom.  Economics trumps terroir, every time.

The other pachyderm in the packing shed is the loss of jobs in SA caused by bulk shipments, which is why SA drivers don’t pump their own petrol.  Not because they are lazy, but to provide careers for other less fortunates.

As my Classic interlocutor pointed out, apart from the usual WOSA suspects flying business class to Europe to stamp their tiny feet and take their friends out for feasts from their R35 million honey pot, what else is the industry doing about its biggest challenge since phylloxera?  Where’s the co-ordinated counter attack?  What is the plan?