The Australian 2021 vintage is set to be a big one. With more wine coming through the pipeline, we address the opportunities for finding it a home.
Vintage 2020 was a forerunner for the disaster that rolled out for the rest of the year. Bushfires wreaked havoc across some of Australia’s most renowned viticultural regions. Wine Australia reported 25 % of Australia’s premium wine regions impacted by fire and smoke. The total national crush was just 1.52 million litres when the ten-year average is 1.75m.
This year we will see the biggest harvest in three years estimated to be 1.8 million litres.
The 2021 Vintage will first replenish wine stocks heavily depleted due to the smaller vintages of the past two years.
But the new boost in wine stocks presents unique challenges.
2020 was also the year Australian wine saw the lucrative Chinese market as useful as wiped off the map.
Australian Grape and Wine chief executive, Tony Battaglene said we are still waiting for the final determination from the anti-dumping and countervailing duty cases and doesn’t expect any change from the interim findings. He says if anything, it will be worse.
“We have seen nothing to suggest the relationship or tensions have eased, so we are not forecasting any improvements. We are telling everyone they should be planning for four to five years without China for bottled wine because that is how long the duties will last,” says Battaglene.
There was some hope with the new trade minister, Dan Tehan making inroads when he wrote to China’s new Commerce Minister, Wang Wentao, in December 2020. Both were new to the roles and could have provided a circuit breaker.
Mr Tehan told ABC News, “My hope is that with the appointment of a new Minister in China at the same times as my appointment that we will be able to get a dialogue in the relationship happening again.”
Since then, Mr Tehan’s efforts have not met with success to date; however, Battaglene wants to keep the China message in perspective. He says despite the panic, China is ten per cent of our volume, which is less than a normal vintage variation but important in value representing 30 per cent.
Battaglene says we will find new markets previously starved of high-value quality Australian product because China was sucking this market dry.
Battaglene says the UK shows excellent promise for Australian wine stocks in the future, particularly with the impact of Brexit felt in Europe.
“UK has always been a good market for us, and there has always been a lot of product there. It has been growing significantly in the past few months,” he says.
“Brexit will be good for us. The Europeans are starting to realise they are going to have problems with border restrictions getting into the UK. There is good sentiment for Australian product, so we expect the UK market to remain strong for some time and to probably take up some of the volumes that we need them to.”
Looking positive on the home front is the domestic tourism boom as an unexpected post-Covid market for real wine sales. International border restrictions and Australians looking to our food and wine regions for holiday destinations have led to this sector experiencing a significant lift.
Cellar Door sales in some of Australia’s tourism centres have been exploding, and many are finding it challenging to keep up with demand.
“Local Cellar Door sales have taken us all a bit by surprise,” says Battaglene. “Areas such as Orange, the Hunter and the Barossa and McLaren Vale are running short of stock because they have had such a big boom combined with the previous low vintages.”
Battaglene suggests this development has been so encouraging for these producers that it has almost compensated for export issues and on-premise closures.
“For the smaller producers in tourism regions, it has been a positive development. We are hoping tourism campaigns such as South Australia’s will now make wine tourism a focus.
“The campaigns will be positive, and this (development) will remain so for some time, at least until people can spend their money overseas again. It has kept these businesses alive,” says Battaglene.