Red Wine Trouble in “Auz”

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The Riverland wine region is the largest wine producing region in Australia.  It stretches west from north of Adelaide along the Murray River from Paringa to Blanchetown.  It is home to about 1,000 grape growers who cultivate in excess of 21,000 hectares of vineyards, one third of Australia’s wine production.

Over half of these growers sell their grapes to a multinational company, Accolade Wines.  Accolade now has more wine in storage than the Riverland produces in a single vintage, equating to about 400 million litres of excess red wine.

Accolade is offering financial incentives for growers to switch from growing red to white grapes or to leave their vines dormant for the foreseeable future.  The incentives are not believed to be sufficient to cover the cost, thus making grape growing unviable.

Elsewhere, in the Murray Valley, it’s estimated that 20,000 tonnes of grapes were left unsold this season. Overall, in Australia, wine exports decreased by 26 per cent in 12 months with no relief in sight.  This has been coupled with rising input costs, which have at least doubled in the past year due to the rising cost of chemicals, fertilizer, fuel and labour.

The oversupply of red wine is the result of tariffs on Australian wine being exported to China and global freight issues (see my post from December 31, 2021, on Wine Shipping Delays), which have led to a downturn in red grape prices.  This situation is expected to continue for the next few years.

Although switching from growing red grapes to white would remove unwanted red and replace them with varietals like Sauvignon Blanc, Pinot Gris and Prosecco, which currently have much more demand, the transition would not be cheap or completed quickly.  It takes anywhere between two and six years to switch from one type of vine to another and for them to start producing the same amount of fruit as before.

Grape growers are calling for government assistance but even that may be too little, too late for some.  However, at this point it is most likely that the government would not provide direct financial assistance but instead refer growers to rural small business grants and rural assistance loans.

Some experts are forecasting a generational shift in ownership of vineyards.  There has been a recent increase in the number of vineyards being listed for sale.  Given the current favourable value of the Australian dollar, it is thought that the real estate market may attract the attention of international investors.

Some vintners are even expected to rip out their vines and plant almonds or other crops.

Having experienced fires, droughts and other effects of climate change over the past few years, Australian vintners continue to live in interesting times.  Grape growing is proving not to be a career for the faint of heart.

Sláinte mhaith

Australia’s Wine Regions

The vineyards of Australia cover 170,000 hectares in different wine regions in New South Wales (NSW), South Australia, Victoria, Western Australia, Tasmania and part of Queensland.

Australia has become the 7th biggest wine producing country having about 1,200 million litres of wine produced each year. With the country’s own consumption representing less than 40% of the production, Australia is the 4th largest wine exporter.

Australia has spent millions of dollars to build a brand around Shiraz (Australia’s word for Syrah). As a result Australia wine production has tripled since 1990. However, despite this success, Australian wines have suffered some serious drawbacks in the media. Wine critics often disregard most Aussie wine as “Critter Wines”, referring to the cute animal designs that adorn many of the wine labels.

Australia’s main grape varietals are Shiraz followed by Chardonnay. The two varieties make up 44% of the total wine production.  However, Australia is working toward diversification.  The balance of production comes from Cabernet Sauvignon, Merlot, Sauvignon Blanc, Sémillon, Riesling, Viognier, Pinot Noir, Grenache, Sangiovese, Mourvèdre and Pinot Gris.

The Wine Regions

Margaret River (Western Australia) produces Cabernet Sauvignon, Merlot, Sémillon, Sauvignon Blanc, Chenin Blanc, Chardonnay, and Shiraz.

Barossa (South Australia) produces Shiraz.

Coonawara (South Australia) produces Cabernet Sauvignon, Chardonnay, Malbec, and Merlot.

Adelaide Hills (South Australia) produces Chardonnay, Riesling and Pinot Gris.

McLaren Vale (South Australia) produces Shiraz, Cabernet Sauvignon, Merlot and Chardonnay.

Clare Valley (South Australia) produces Chardonnay, Sémillon, and Riesling.

Hunter Valley (New South Wales) produces Sémillon, Chardonnay and Cabernet Sauvignon.

Yarra Valley (Victoria) produces Chardonnay and Pinot Noir.

Rutherglen (Victoria) produces Shiraz and Durif.

Heathcode (Victoria) produces Shiraz and Cabernet Sauvignon.

Mornington Peninsula (Victoria) produces Pinot Gris, Pinot Noir and Chardonnay.

Tasmania produces Riesling and Pinot Noir.

The grape varietals produced in Australia are bolder than the same varietals grown in the northern hemisphere, in places like France, Germany, or Canada.  However, if you prefer the bolder spicier flavours, Australian wines may be right for you.

The impact on the wine industry from the wild fires currently raging in Australia remains to be seen.  More than 3.4 million hectares of land have already been destroyed.  Previously the most land burned during an entire fire season was only 280,000 hectares.

Vines not destroyed by the fires could still be impacted by the smoke.  Bushfire smoke can permeate the skin of the grapes as they ripen, causing wine to have an unpleasant smoky characteristic. It is worse in red wine, when the skins are used to create colour.

Experts say it is still too early to determine what the extent of the fires will have on the 2020 harvest. 

Grape growers are facing a second problem; record high temperatures which have reached the upper 40’s Celsius.   Extreme heat can cause leaves to droop or even drop off, leaving grapes exposed to sunburn. This causes discolouration and affects the flavour profile of the wine.

The effect of heat can be managed provided vineyards still have access to enough water – which they don’t in many areas across South Australia, central and northern Victoria, and NSW.

As we prepare to enter 2020, no one seems to face more challenges than the Australians.  I fear that some of the Australian wines the world enjoys today may soon disappear forever.  A sobering thought to close out 2019.

Sláinte mhaith