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Australian wine producers report smallest vintage since 2000

Australian producers have been left with their smallest vintage in a generation after battling persistent rainfall, unusually cool conditions and flooding throughout 2023.

Trade group Wine Australia delivered an estimate of 1.32 million tonnes for the overall vintage, which is 26% below the 10-year average.

It is the lowest vintage recorded since 2000, and producers across the country reported that conditions were the most challenging in at least 20 years.

Australia was hit by a third consecutive La Niña event, which led to the wettest year since 2011 and the coolest year since 2012.

Relentless rainfall throughout the winter and spring across much of Southeastern Australia made it difficult for growers to access vineyards. Conditions in several regions led to lower yields, delayed ripening and challenges managing disease.

Meanwhile, Wine Australia reported that inventory pressures resulted in yield caps being imposed, vineyards ceasing production and uncontracted grapes remaining unsold.

‘This smaller vintage, which will reduce the wine available for sale by around 325 million litres, is likely to have a considerable impact on the bottom line of grape and wine businesses all around Australia, at a time when the costs of inputs, energy, labour and transport have increased significantly,’ said Peter Bailey, market insights manager at Wine Australia.

Australia’s underlying inflation rate hit 6.4% in May, causing the Reserve Bank to implement repeated interest rate rises, which threaten to tilt the economy into a recession.

On a brighter note, the exceptionally cool season should lead to high-quality grapes, which will help producers meet growing demand for ‘premium’ wines in key markets such as the UK and the USA.

‘Around the world, particularly in mature markets, there has been a long-term decline in commercial wine sales and an increase in premium sales,’ added Bailey.

The crush of red grapes in 2023 is estimated at 711,777 tonnes, which would represent a 26% decrease compared with 2022, sitting 25% below the 10-year average of 943,146 tonnes.

Meanwhile, the white crush reached an estimated 605,321 tonnes. That is a decrease of 22% compared with 2022 and 28% below the 10-year average of 839,013 tonnes.

Shiraz remains the top grape variety, ahead of Chardonnay, Cabernet Sauvignon, Sauvignon Blanc and Merlot.

South Australia contributed 55% of the crush, followed by New South Wales (27%) and Victoria 13%. Western Australia was an outlier, as it had a very good season overall, and it increased its share to 3.5%, while Tasmania and Queensland each accounted for slightly less than 1% of the total harvest.

Wine Australia reported that the main declines came from the country’s three large inland wine production hubs: the Riverland in South Australia; Murray Darling-Swan Hill, spread across New South Wales and Victoria; and Riverina in New South Wales.

The crush from those regions dipped 28% year-on-year, so their overall market share fell to 68%, which is significantly below the long-term average of 74%.

The combined harvest in Australia’s 59 GI wine regions and 26 GI zones was only down by 15% compared with 2022, at 417,162 tonnes.

In value terms, the total estimated value of the 2023 crush at the weighbridge was A$983m, a 19% decrease compared with 2022.

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