AUSTRALIAN vineyards have delivered the nation's smallest winegrape vintage in more than 20 years - down about 25 per cent on the previous harvest season and 10-year averages.
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The total weighbridge value of this year's 1.32 million tonne grape crush slumped to $983m, or about $230m below 2022, as unusually damp and cool conditions collided with shrinking demand for non-premium wine from large inland production regions.
China's contentious ban on Australian wine and a global slide in consumption of cheaper big volume lines retailing for less than $10 a bottle have been blamed for an oversupply of commercial wines and reduced grape demand from local wineries.
Yet, despite many vineyards recording the most challenging growing conditions in two decades as Australia encountered its wettest and coolest years since 2011 and 2012, in some areas the cool summer was also conducive to producing high quality fruit with excellent flavour.
Although wineries will produce about 325m litres less wine this season, the average purchase price they paid for the fewer grapes they processed actually crept up 2pc.
In fact, quality and yields were so good in Western Australia, where growers bucked the national trend and generally enjoyed a very good season, the state's modest share of the national crush lifted to 3pc.
In contrast south eastern Australia's relentless rainfall last winter and spring made it difficult for many growers to access and manage vineyards as disease risks rose, yield potential declined and ripening was delayed.
Peak market insight and research body, Wine Australia, also highlighted how carryover inventory pressures forced wineries to impose yield caps, which in turn, meant certain vineyards had now ceased production temporarily, or had big areas of uncontracted grapes unsold by harvest.
In July, big winemaker, Treasury Wine Estates, announced it would close its commercial Karadoc winery, near Mildura in North West Victoria, next year, because of rising input costs and falling global demand.
The wine giant, which also owns the luxury Penfolds label, will also sell nearby commercial vineyards at Lake Cullulleraine in Victoria and Yankabilly across the border in NSW.
Wine Australia market insights manager, Peter Bailey, said the collapse in average yields per hectare from almost 14 tonnes in 2021 to less than nine tonnes this year coincided with significant rises in crop input costs, energy, labour and transport expenses.
"This smaller vintage since 2000 is likely to have a considerable impact on the bottom line of grape and wine businesses all around Australia," he said.
Wine Australia's assessment of the 2023 vintage followed a survey of 621 winemakers who handled 91pc of the winegrape crush.
Mr Bailey said it was impossible to say what share of the overall reduction could be attributed to demand-driven consequences as opposed to seasonal conditions.
"However, supplies of white grapes, which are in higher demand, were reduced by a similar percentage to reds, which suggests seasonal effects were the main contributor to the reduction," he said.
Although still the largest wine state, with 55pc of the total crush, South Australia recorded its second smallest vintage since 2007 - down 18pc on last year.
NSW, Australia's second biggest producer, supplied 27pc of the crush and Victoria 13pc.
Production in Victoria and NSW fell 40pc and 28pc respectively.
The main reduction in crush volumes occurred in the three large inland wine regions - SA's Riverland, NSW's Riverina, and the Murray Darling-Swan Hill regions of northern Victoria and South West NSW.
The combined crush from these regions was down 28pc to 899,936t, meaning the large inland regions' share of the national volume fell to 68pc compared with their long term average of 74pc.
Average prices for the large inland region grapes also fell 11pc, driven by a 21pc decline for red varieties and a smaller (5pc) price drop for whites.
However, the average value of purchased grapes in other regions lifted 4pc overall in 2023, with reds up by 3.6pc and whites up 5pc.
Mr Bailey said the price differences reflected the stronger market for premium wines than for commercial wines.
"Around the world, particularly in mature markets, there has been a long term decline in commercial wine sales and an increase in premium sales," he said.
"More recently, there has also been growing demand for white wines."
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
