Australians themselves drink enough of the stuff, with over 530 million litres consumed domestically each year (that’s around 30 litres per person). But it’s the country’s wine exports that have been the real success story and which offer the biggest opportunity for future expansion. Between 1991 and 2007, production more than trebled in size while the value of exports grew from $212 million to $3 billion. Australia is now the world’s fourth-largest exporter of wine, after France, Italy and Spain. China is fast becoming one of the most important markets for Aussie wine and, since 2007, wine exports to China have grown by 333%. Despite this, exports to China still account for just 6% of the total and by far the largest importers of Australian wine continue to be the UK and the USA.
Rising demand from China and other markets presents a huge opportunity for Australian producers. However, there’s work to do if the country wants to continue holding its own against new world rivals such as New Zealand, Chile, Argentina and South Africa, and against resurgent and increasingly inventive old world wine producers.
Growing international competition is just one of several headaches which have recently dogged wine producers from down under. Three bumper harvests between 2004 and 2006 led to a massive market oversupply. From 2007 the industry was also affected by changing economic conditions, with a strong Aussie dollar weakening the value of export returns and with lower retail prices further squeezing profit margins.
Facing a tougher international market, Australian wine producers are pinning their future hopes on several developments. The recent weakening of the Aussie dollar offers a potential opportunity for the industry to rebuild and increase its international competitiveness. At the same time, producers and exporters hope to capitalise on China’s proposed plan to initiate an anti-dumping probe into European wine imports.
However, the development with biggest potential for far-reaching success centres on current industry efforts to redefine what the industry and its wine ‘stand for’.
New marketing initiatives are now underway which are aimed at encouraging consumers in established markets such as the UK to explore premium Australian brands, while also maintaining sales of the high-volume brands. Although a small number of major conglomerates are responsible for a large share of total production, there are many hundreds of smaller wineries specialising in “boutique” production. Many of these smaller producers are highly innovative in their exploitation of new styles and varieties.
Australia's most widely-produced grape varieties are Shiraz, Cabernet Sauvignon, Merlot and Pinot Noir (for reds) and Chardonnay, Semillon, Riesling and Sauvignon Blanc (for whites). However, around 90 different varieties are commercially planted and these include Spanish and Italian varieties alongside the traditional French ones.
For more information on the styles of Australian wine produced, and for a special focus on Shiraz and Semillon, see the Making, Drinking and Pairing sections of the Drake Vine website).
Although wine is produced in all of Australia's states and territories, most of the country’s wine producing regions are in cooler southern regions – especially South Australia, Victoria, New South Wales, Tasmania and southern parts of Western Australia. Much of the country’s bulk wine comes from grapes grown in the warm climate Murray-Daring basin (see the Growing section of the website for more info on the main wine producing regions).