Talking points for Aussie wines

ArticlesRegional & Country Focuses

David Williams takes stock of a country which sometimes gets taken for granted in the UK, but where climate, viticultural choices and consumer trends are all gradually reshaping the landscape


1. La Niña cuts the 2022 vintage down to size

After years in which drought, heat and fire were the abiding concerns for Australian producers, both the 2021 and the 2022 vintages were very much shaped by a La Niña weather pattern, which brought abundant spring and early-summer rain and generally cooler temperatures across the country’s main growing regions. The 2021-2022 growing season was the more challenging of the two, with the wettest November in Australia since records began (in 1900) contributing to a much lower crop than the bountiful 2020-2021: at an estimated 1.73 million tonnes, the crush was down by 13.5% on 2021, and by 2% on the 10-year average. According to Wine Australia, the lower yield wasn’t all about the weather, however. “Restricted winery tank capacity, together with reduced global demand and prices for red wines may have resulted in wineries and growers reducing overall production and/or intake of grapes,” the organisation said in its vintage report.

2. Exports take a knock, but there’s a silver lining

“It will come as no surprise to many of you”, said Wine Australia chair, Louise Allan, in her introduction to the 2021-2022 Wine Australia Annual Report published back in September 2022, “that the Australian grape and wine sector has faced continuing unprecedented challenges throughout 2021-22.” Some of those challenges are far from being unique to Australia, notably the lingering effects of Covid 19, the war in Ukraine, and rising inflation, although the sheer distance to its main markets has meant the country has suffered more than most from the still-ongoing global freight crisis. What is unique to Australia, however, is the punitive tariffs imposed on Australian wine exports to mainland China (up to 218.4% on bottled wine) which have had a predictably dire effect on sales in one of the country’s main markets, and which have sent total Australian wine exports tumbling 19% in value to A$2.08bn. On the bright side, value is actually up by 5% if you strip out the Chinese market; and the depreciation of the Australian dollar has made it much easier for Australian producers to compete on price.



3. Could the trade deal boost sales in the UK?

At first glance, the numbers don’t look all that good for Australian wine over the past year in the UK: according to Wine Australia, shipments to the UK were down by 14% to in value to A$395m and by 12% in volume to 222 million litres. That many Australian exporters don’t seem unduly concerned by the dramatic drop – and had, in fact, been anticipating it – is down to two factors. First, many importers stocked up on Australian wine during the transition period after the Brexit vote and ahead of the official departure date on December 31, 2020. Second, Australia, which sells most of its wine in the UK through the off-trade, was one of the biggest beneficiaries of the swing from on- to off-trade during the pandemic.
As life in the UK turned to its post-Brexit, post-pandemic “new normal”, a correction was inevitable. The hope is that the absence of wine tariffs in the post-Brexit UK-Australia trade deal signed in July 2021 will provide a boost to both sales and the number and range of Australian producers present in the UK market in the next few years.

4. The rise of Australia’s natural wine fringe

According to the influential Australia-based wine writer, Max Allen, “the number of producers who today identify as natural or are a bit natural-ish or tick a lot of the natural boxes is uncountable” in Australia. Allen is one of many Australian wine observers who believe the anarchic movement, which began to emerge Down Under in the late 2000s, has been an overwhelming net positive, injecting some much-needed creativity and wildness into an Australian wine scene that had, with some noble exceptions, become aridly corporate and big brand-oriented. It took a while for the fruits of the Aussie natural scene to arrive on these shores – and much of it is still consumed via domestic cellar doors and wine bars. But the best – including Jauma, Luke Lambert, Koerner and Charlotte Dalton – have done an enormous amount to pep up Australia’s image in the UK and surely represent an even bigger share of its future.

5. Sales are growing on the secondary market

While the arrival of the new, natural (and naturalish) wave of producers has offered a challenge to Australia’s established top fine wines at home, those same top wines still have the feel of being insurgents on the international fine wine scene. Progress, however, is palpable, with Australia’s finest now significant players in the world’s auctions and secondary markets. According to Liv-ex, the country remains the leader of what it calls the “Rest of the World” secondary market, which is effectively wines from outside the dominant trio of France, Italy and California. In 2021 it had 36.2% of the RoW wines traded on the Liv-ex platform, putting it ahead of Spain (26.1%) and Germany (16.5%). And while China’s punitive tariffs affected fine-wine trading as much as the rest of Australian wine sales, Liv-ex singled out Henschke Mount Edelstone, Jim Barry The Armagh Shiraz, Clarendon Hills Australis and Torbreck The Laird as wines with a rapidly growing secondary market following. Meanwhile, the biggest Australian name of all, Penfolds Grange, has cemented its reputation as one of the world’s most in-demand wines. The bottle of 1951 bought by a Sydney collector in 2021 for A$142,131 was, at time of writing, the most expensive bottle of Australian wine ever sold.

6. Old vines are a trump card for Australia

Old vines are a big deal at the moment. Some serious momentum is building behind initiatives such as Old Vines Conference, the international campaign dedicated to recognising, logging, understanding and protecting what the trade now understands is among its most precious resources. And there’s a real sense that consumers have grasped the idea of vieilles vignes as a quality cue.

It’s hard to think of a country better placed to take advantage of this trend than Australia, which has long been setting the pace when it comes to looking after its old-vine heritage. Introduced in 2009, the Barossa Valley’s Old Vine Charter has set the template for much of what is happening elsewhere in the world by organising the region’s quite astonishing collection of old vines into four distinct categories: old vines (35 years old or more), survivor vines (70+ years old), centurion vines (100+ years old) and ancestor vines (125+ years old). With similarly old stocks producing some of the best wines in, among other places, Eden Valley, McLaren Vale and Clare Valley in South Australia, Rutherglen, the Goulburn Valley and the Grampians in Victoria, the Hunter Valley in New South Wales and the Swan Valley in Western Australia, this is one area in which Australian wine trumps Europe for historical depth.

7. Grenache can stand the heat

One variety that has benefited from the interest in old vines is Grenache, which was among the first varieties planted in the early days of Australian wine, and which accounts for some of the oldest working vines in Barossa and McLaren Vale. After years in which plantings declined dramatically, it has returned to popularity in the past decade. And while it still only accounts for some 1.1% of the total Australian vineyard (1.7% of total reds), its renewed reputation is reflected in the price per tonne of grapes, which went from A$577 in 2014 to $986 in 2019, with the average price of McLaren Vale Grenache actually eclipsing that of Shiraz for the first time in 2020.

The fashion for Grenache is partly explained by its ability to make fragrant, Pinot-esque wines in extreme heat; it’s also a key ingredient in the increasingly popular GSM blend – although intriguingly the name behind the “S” is not quite as predictable as it once was. While many merchants (and supermarket buyers) insist that Aussie Shiraz remains as popular as ever, it’s a curious fact that many Australian producers are switching to Syrah on their labels to signal a more northern Rhône-like, cooler-climate style.

8. The rise of the Riverland

The Riverland is to Australia what the Languedoc-Roussillon is to France: the unglamorous hot heartland of production that tends to get overlooked when the quality hierarchy is drawn up. But while Riverland remains at the heart of most South East Australia-labelled brands, accounting for 30% of the annual Aussie crush (versus the 4% of the Yarra and the 2% of the Barossa), it’s also, like southern France, home to some of the country’s most creative and inventive producers, many of them working with unusual varieties (Nero d’Avola, Lagrein, Vermentino, Zibibbo) and natural (or naturalish) techniques. Brash Higgins, Deliquente and Unico Zelo are among the names to look out for from this “new Riverland”.

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