THE Pacific : A New Toast From the Land Down Under : Their sales soaring in the U.S., Australia’s wine makers launch new promotions and sign distribution pacts to enhance their foothold.

Buoyed by their success thus far in the U.S. market, Australian wine makers are trying to build on their gains by expanding distribution, increasing promotions and by forming alliances with California wineries.

California vintners have long competed against European wine makers for U.S. market share, dominating the scene in the West and snatching larger portions of eastern markets from their foreign competition.

However, Californians had no serious competition from the Pacific until Australian wine sales showed a significant increase in 1987, a year in which Aussie vintners ranked sixth among wine exporters to the United States.

Australia’s wine makers sold 1.2 million gallons of wine in the United States in 1987, a significant rise from the 341,000 gallons sold in 1986. Sales of Australian wine rose again last year, climbing from $16.1 million in 1987 to $16.7 million in 1988.

In contrast, California wineries generated sales of $5.5 billion in 1988, selling 72% of all the wine consumed in the United States.

While some of Australia’s wineries are just beginning to export to the United States and many of the 90 Aussie brands have a very small presence in the U.S. market, others are spending large sums of money to capture a share of the market.

Sydney-based Penfolds Wines, Australia’s largest wine maker, recently signed an agreement to acquire a 50% interest in the Geyserville-based Geyser Peak Winery, one of the top 25 producers in California. Penfolds was already exporting its Penfolds and Wynn’s Coonawarra Estate brands to the United States.

Geyser Peak will use the new capital to expand production of its product line, and Penfolds will use its new California facilities to produce a range of wines under its Seaview label.

The deal will enable Penfolds to more effectively penetrate the U.S. market,

“By operating from U.S. ground, we can learn more about the American consumer,” said Ian Mackley, managing director of the Australian firm. “We can also develop better channels of distribution.

“There won’t be any tariffs. . . . Also, the price of our wine has changed with fluctuating exchange rates,” Mackley said. “Retailers and consumers get confused by changing prices. We’ll be making wine in the U.S., and that means we can get rid of the exchange rate problem.”

Marketing Expertise

Another Australian wine maker--Orlando in Barossa Valley--has developed a different kind of partnership with a U.S. firm. Christian Brothers, the Napa Valley vintner, recently agreed to manage distribution arrangements for Orlando’s Jacob’s Creek brand.

Orlando began distributing Jacob’s Creek, Australia’s top wine export worldwide, in six U.S. metropolitan markets last September. By January, Jacob’s Creek was being distributed in 30 states. Orlando decided to work with Christian Brothers because the California winery has much more marketing expertise in the United States, said Robin Day, chief of wine making operations for Orlando.

Day, who recently served as a judge at a wine contest at the Los Angeles County Fair, has embarked on a promotional tour of the United States. “I’ve been kissing babies and shaking hands,” he said. “I’ve been visiting markets and wine shows. I’ve been showing people the wine and telling them what we’re trying to achieve and telling them how we make it.”

Another promotional effort--one managed by the Australian Wine Importers Assn.--is designed to generate U.S. interest in all Australian imports. The association, financed by contributions from Australian wineries, operates out of the offices of the Australian Trade Commission in San Francisco.

The association, formed in June, 1988, has attempted to ensure that Australian wine is represented at wine festivals, contests and local wine tastings. The trade group, which has a budget of $100,000, is also developing a promotional brochure. Priscilla Felton, chairwoman of the association, said the efforts are needed because some Americans think only of beer when asked about Australian beverages.

“We have to let Americans know that we are a wine-producing country,” she said.

National Image

Australian trade commission officials have had a big role in the improvement of their country’s wine sales, according to Paul Gillette, publisher of the Wine Investor, a Los Angeles-based trade publication.

“They’ve worked very hard at linking wine to their national image,” he said. “That image is positive in the minds of most Americans.”

Some wine industry observers believe the Australians can continue to make inroads into the U.S. market.

“There’s been a growing interest in all things Australian,” said Michael Lynn, editor of Beverly Hills-based Beverage Bulletin, a trade publication. “The ‘Crocodile Dundee’ phenomenon has spilled over into other areas. More Americans are vacationing in Australia, for example. The quality of the wine has always been high. Now, it’s getting more attention.”

Californians have been drawn to the wine because the prices--generally ranging from about $5 to $15--are moderate, said Chris Sandin, general manager of the Wine House, a Los Angeles shop. Many also buy the product because it tastes more like the Golden State’s variety than Europe’s fermented potables, Sandin said.

“It’s fruity like California wine and it’s softer and has less acid than European wines,” he said. “The varieties are also identified the same way California wines are classified. That makes Californians feel at home.”