The strong Australian dollar is adding to winemakers’ woes.

AT A recent shindig for elite restaurateurs and niche wine merchants at the Australian Museum there were two rooms: one showcasing domestic labels, the other, the imported stuff.

The imports room was buzzing. Wine merchants are enjoying a surge in demand for European product. Spanish wines are all the rage and the French always have a good pitch, while Italian, German and even Austrian offerings are also experiencing a resurgence.

Among savvy consumers in the elite eateries of Sydney and Melbourne, the days of the ”Australian wines are the best” mentality are gone. How far the trend will develop is now the question.

Given the incursion of low-cost online vendors, this is the last thing the domestic industry needs, already battered by years of glut and more recently by the oppressive impact of the high Australian dollar on their export income.

Foster’s, which only last month won some sharemarket support for demerging its wine businesses, remains under pressure from flat demand for beer and the challenge from micro-breweries, while the spin-off, Treasury Wine Estates, not only loses on the currency but is up against online imports. Worse, the booming demand for a foreign drop is mostly contained to European wines, not American (where its wine assets are).

Last week’s Bureau of Statistics figures are chilling: in the March quarter, domestic wine sales fell at the fastest annual rate since 1990 – incidentally the first year of a recession – while sales of imported wine actually rose by 2.2 per cent to 12.7 million litres.

Australian drinkers spent $85.1 million on imported wine during the quarter, up 1.4 per cent. In just one decade, imported wine has risen from 3 per cent to 15 per cent of domestic wine sales.

Now that’s a trend. And the problem with trends is, should they start with the elite market – in this case, sommeliers from top metro restaurants and high-end retail consumers – there is every reason to fear that they might gain pace with mass market penetration.

There are three kinds of wine consumers; from smallest to largest in consumption terms they are wine buffs, wine bluffs and the cheap plonk drinkers. This last segment, more focused on quantity than quality, is unlikely to switch to European wines. The wine market is fickle, though, and should those who buy more for appearance than quantity really go for European wines, the local industry would suffer.

But it’s not entirely one-way traffic. While the internet vendors have the advantage of low costs and a high $A, they pay more taxes. After customs duty and Wine Equalisation Tax, we are talking 50 per cent.

IT’S Snowball by name, and snowball by nature. Shadforth’s boss Tony Fenning has been under pressure to do a deal for some time. Perpetual had come sniffing around the financial planning shop but Fenning opted to partner-up with small listed player Snowball in a scrip deal which delivers his shareholders some liquidity: a stockmarket exit, that is.

And so it is that Shadforth’s faithful emerge with 71 per cent of Snowball shares. The biggest holder is Melbourne planner Kevin Bailey.

That 71 per cent change of control was also, incidentally, smack bang on what the Snowball crew required under their change of control provisions to exercise a swag of performance rights they granted themselves early last year, a deal which was then upgraded at the annual meeting in November.

The spin is ”transformational merger”: a transaction which sees two financial planning groups combine to throw up a wealth management business with $14.3 billion under management.

The deal makes sense. There is a projected $5 million in synergies from slapping the two together and eliminating head office costs, in 2013 that is.

It’s not so alluring in the meantime, as Snowball shareholders get diluted by 68 per cent in 2012.

The deal is more positively ”transformational”, however, when it comes to the personal wealth of the Snowball junta.

Snowball boss Tony MacDonald and his crew are up $3.5 million on their fresh swag of performance rights, which vest on a change of control. Nice work.

The other telling aspect of this deal is that of providing incentives to financial planners, now that trailing fees are under threat from recent financial advice reform proposals.

The government has been disingenuous on this one, trumpeting a ”broad-based ban on volume based payments”. The words ”broad-based” have now been relegated to the realms of shifty political rhetoric.

A ”broad-based” ban must mean ”a sort of” ban as product trails get eliminated at the planner level but not at the platform level.

That means the major banks, which control the platforms, have once again won the government over with their lobbying.