Wine a Day

Is it possible to have too much wine? Of course it is.

The Australian wine industry is in a bit of a pickle at the moment. South Australian premium winemaker, Brian Croser, told a meeting of agricultural and resource economists at Adelaide Convention Centre on 8 February, “The biggest problem for the fine wine community is the negative and deteriorating image problem created by the behaviour of the branded commodity wine industry,”

The oversupply of grapes and a “wine lake” estimated to total more than a million unsold bottles has also been created by massive plantings mostly from the major companies or through contracted vineyard growth that is now not viable, Mr Croser said.

Too much wine is not something that you hear most Australians complain about. In the Australian wine industry however, the glut of wine being produced is starting become a negative. Established brands, like Penfolds’ Grange Hermitage will continue to be recognised as fine wine, and has the price tag to prove it, but there are many great vineyards and wine makers around Australia who cannot command the same sort of price. With a glut of wine being produced that is simply sitting in store rooms, warehouses and bargain bins all over the world, these smaller producers are struggling to be recognized as quality wine makers simply because Australia appears on the label.

I was in Australia at the end of last year and visited a few small wineries in Bendigo, Rutherglen and the King Valley. These “regions” are all in Victoria, in the southeast of Australia. I say “regions” because Australia doesn’t have the same controls traditional European wine regions have. There are state government controls of quality of wine in Australia, however this has not stopped the over production issues it is seeing now. The majority of the European controls, or Denomination/Appellation of Origin Controls, do more than just taste the wine and say if it is good enough for them to give a seal of approval. They also control the volume, therefore quality of wine being produced each year. Each winery has to inform the controlling body how many tons of grapes they have produced and the controlling body tells them how much wine can be produced from that tonnage. This does not happen in Australia, so smaller vineyards who want to produce fine wines are at the mercy of the big corporations when they come to pricing their wine.

Australia is a big country and the big wine producers often have vineyards in many different areas which eliminate the risk of low production. They carry on producing the same amount of bottles regardless of where the grapes come from. Many of Australia’s wine producing regions are in the middle of a very long drought. You would never notice this by the huge volume of wine the corporations are pumping out a year. In Heathcote near Bendigo, I visited a small producer, Pondalowie, who were considering either buying water (which is very expensive in Australia) for the vines. The other option was simply cutting all the fruit off the vines and skipping a vintage if rains didn’t come soon. If they were able to get top dollar for their wine, they may not worry about the cost of buying the water, however, with the current state of the market for Australian wine – that is not really a viable option.

This raises a difficult question for Australia; should they introduce more stringent controls to their wine industry? If so, how would they work? Would this put more pressure on the industry or improve sales? If not, will the smaller producers simply be eaten up by the big corporations? South America, South Africa and now Eastern Europe and China are able to produce wine with lower overheads which is eating into the bulk Australian market, so should they cut their losses now and try to compete in the mid to high end of the market, or keep producing huge quantities and hope their competitors can’t keep up?

I would like to hear other people’s ideas on this, because on one hand it could take away Australia’s competitiveness in the export market, but on the other, it will raise the quality and give the smaller producers more freedom to produce excellent wine.

Author – Chris Metcalfe