Wine Australia changes to pay as you go funding model

Wine Australia is changing its generic marketing activity on offer to a user pays format - the body argues it will give it a “neutral position” and allow it to be “more agile”.

Starting from the new Australian financial year on July 1, companies can select specific activities as opposed to signing up for a full annual programme in each export market.

But some expressed concern that boutique producers would miss out if they couldn’t afford to pay.

Speaking exclusively to Harpers, Yvonne May, European head of Wine Australia, said that seed money from the Australian government would be used to fund core educational activity and communications. This would include the one-day wine school and a generic presence at trade shows.

“It gives impartiality - we won’t be getting a disproportionate amount of funding from a few big players,” she added. The University Wine Championship is just one of the events that will become a user pays activity - “it’s very approporiate to the bigger players”, argued May.

Overall she said the organisation would be “a lot more agile”. May refuted the idea that smaller wineries would be excluded if they couldn’t afford to pay. Previously companies paid by sliding scale based on volumes imported into the market. Where before a small winery may have paid £1,000 for activity across the year, May said now they “get to keep that in their pocket” while the government funds the core activity and individuals can choose to pay for extra events.

Tim Wildman MW, Australian wine expert and consultant, said the move would “relieve some of the tension at the heart of the existing funding model”, where the largest companies “paid the lion’s share but didn’t feel they were getting the love”.

But he worried whether the “pay to play” process would remove qualititative selection. “I’m sure wine Australia will have a strategy to cope with this, but a user pay model does threaten the ability for Wine Australia to put its best foot forward,” he added.

Meanwhile, Paul Shaafsma of Australian Vintage said the firm “fully supports” the user pay system. He said the initiative would allow firms to choose which activity “best suits their brand”.

Paul Henry, strategy director at Winehero and formerly of Wine Australia, voiced concerns that “user-pay schemes potentially circumvent what I believe to be the guiding principle of generic representation: the ability to focus on what you do best, as opposed to what you do most.”

For more news and opinion on this story, see this week’s issue of Harpers, out on Friday April 20.