The end of cheap Aussie wine?

When you think of Australian wines, what comes to mind? Big, beefy reds, mostly made from Shiraz and rich, tropical fruit whites, probably Chardonnay – right? And what about price: around £5 or less?

The bad news
Well, we may have to rethink our ideas of what Australian wines are, as things are about to change for the world’s most successful exporter of wines. For the past fifteen years or so we have relied on Australia to provide large quantities of bargain-priced, competently-made wines. We’ve looked to them for easy-to-like, ripe, alchoholic wines, without worrying too much about where exactly in Australia they come from. You know, Australia is about the same size as Western Europe and yet we’re perfectly happy to pick up a bottle of wine that says its origin is simply “South East Australia”. Have a look for that in the atlas – you won’t find it on any map of Australia, because the term has been coined to cover wines made from grapes from any or all of: New South Wales, South Australia and Victoria. We’re happy with that, yet most of us would turn our noses up at a wine labelled: “Produce of more than one EC country”.

Australia has managed to produce huge quantities of cheap wine because it has traditionally harvested huge crops of grapes produced in irrigated areas such as Riverina, Mudgee Irrigation Area and Riverland – don’t see those names on the label do you? These areas have been highly productive, producing a glut of cheap grapes to make into cheap wine. As the climate is hot, the grapes get very ripe very quickly, maybe too ripe – but, no worries, as the Aussies say, acidity levels, even tannin levels, can be adjusted in the winery. In the past 3-4 years, though, Australian grape harvests have been hit by the effect of severe drought – and when supply drops, prices increase. Australia’s big winemakers are going to struggle to keep their big name brands at current retail prices. Fosters, which owns Lindeman’s, has even been using Chilean wine to provide some of the Lindeman’s blend here in the UK since 2006.

The droughts which have caused the immediate supply problems look set to continue. In any case, it is becoming clear that an industry (and it is an industry at this scale) which relies on producing a crop by using precious river water for irrigation, thereby causing environmental damage to surrounding land, is far from sustainable. To cap it all, the wine trade has received warnings from the Treasury of above-inflation rises in duty on alcohol in the March budget. The days of bargain-basement Aussie wines look well and truly numbered.

So what’s the good news?
We are going to get used to seeing real Australian wine regions on our wine labels: weird and wonderful names like Gippsland, Tumbarumba and Geelong. Wine production will, in general, move out of the hotter central irrigation areas and out towards the coast, as well as up into the hills, where the cooler temperatures will produce wines with the right balance of acid, fruit and tannin – without over-reliance on irrigation and winemakers’ adjustments.

If you’re a fan of heavy-weight Barossa Valley or McLaren Vale Shiraz – don’t worry, these wines are not going to disappear. But the range of wine styles we will see from Australia will be broader: we’ll see more crisp, mineral Sauvignon Blancs, and elegant, scented Pinot Noirs. More choice and greater regionality, coupled with more sustainable winemaking have all got to be good news.

But the new Australians are just not going to be as cheap as they once were – and we are a nation of bargain hunters when it comes to wine. So maybe one effect is that we’ll find more shelf space devoted to other countries, while the Australian section shrinks. Wines from France and Spain, who can still produce wine relatively cheaply in some regions, may be the ultimate beneficiaries.