Australia's wine industry at a crisis crossroad

MURRUMBATEMAN (Reuters) - From a picturesque hill overlooking the hazy distant foothills of Australia's eastern ranges, Bruce March can see a crisis facing the country's A$2.4 billion (£1.1 billion) wine export industry with crushing clarity.

March, chief winemaker at Doonkuna Winery, in prize cool climate vine country north of Canberra, had been looking forward to a bumper 2009 harvest, tripling production capacity last year in anticipation of rocketing China demand for his wine.

But the global financial crisis has exploded that interest, bringing with it a soul-searching for Australia's vignerons, ironically when good rains and a late summer are set to bring one of the best harvests for years.

Asian demand grows for Australian wine

SYDNEY (AFP) — Asia had a thirst for Australian wine in 2008, with an industry report on Thursday naming China, Hong Kong and Japan among its top-five growth markets in an otherwise dismal year.

Low-yield harvests and a strong Australian dollar placed enormous pressure on the country's winegrowers last year, driving down the value of exports for the first time in 15 years, said the government's Wine and Brandy Corporation.

"Despite the challenges there were some highlights during the past 12 months, particularly in Asian markets," the corporation said in its annual report, released Thursday.

While the value of exports to Europe and North America declined -- sinking 17 percent and 25 percent respectively -- Asian exports grew eight percent, with the value of shipments almost double that of Europe.

Australian consumers start demanding more from winemakers

Palate fatigue has set in throughout Australia. Randall Pollard of Randall's Wines and Spirits in Melbourne says consumers have started complaining of the "sameness" of domestic wines. "In the past, Australian winemakers aimed for consistency, and I suppose allied with that there is a sameness," Pollard said. The sentiment is forcing Australian winemakers to step up their games to compete with their rivals in Italy, France, Spain and New Zealand. Sydney Morning Herald (Australia), The (16 Dec.)

Cheap wine and too much growth

First the good news: Australia's wine grape growers are looking at another big vintage, probably close to last year's 1.837 million tonnes, meaning consumers will continue to enjoy plentiful cheap wine - the glut continues.

And now the bad news: Australia's wine grape growers are looking at another big vintage, probably close to last year's 1.837 million tonnes, meaning our wine industry remains under stress, with vineyard values falling, plenty of smaller wineries going under and our biggest wine makers being steadily reduced to slave-status by the supermarket giants.

But wait, there's more: We're exporting less wine and doing it at lower prices. The mainstay UK market has turned particularly sour - supermarket gorilla Tesco almost makes Woolworths and Coles appear supplier-friendly.

Latest News 5 Filipino troops killed in clash with militants Penfolds recognised as Australia's best export wine

Kym Schroeter, Penfolds Senior White Winemaker, reported that the climate in 2005 had been favourable for the Adelaide Hills region, helping produce high quality wine. "Vintage 2005 was a cool year and particularly suited the Adelaide Hills," he advised. "The wine is normally a multi-regional blend, sourcing the best parcels of fruit available. After a very strict culling of barriques, the resulting blend was exclusively Adelaide Hills, for the first time ever."

The trophy was established in memory of a former chairman of the AWBC, Mr George Mackey, who died in office in 1990.

The award is presented annually by the AWBC to the most outstanding export wine of the year. Initial nomination is made by AWBC wine inspectors, who set aside the best wines during the routine inspection of every exported Australian wine.