As the dust settles on the 2011 vintage it becomes clearer than ever that it, more than any of our recent run of challenging seasons, was the vintage Australia certainly did not need to have. The industry was startled to discover that despite virtually all official predictions of a crop of around 1.1 Ð 1.2 million tonnes, it came in at a massive 1.62 million tonnes, despite the rain and disease across south-eastern Australia that caused up to 100% damage to crops in regions like northwest Victoria. How an industry of this scale can be so spectacularly deficient in its ability to gauge its own productivity is perhaps another matter, but it’s now abundantly clear that Australian winemakers now have twice as much wine as they need to cover annual demand, currently standing at 1.28 billion litres, 755 million litres of which are exported. Prior to the vintage, the Australian Bureau of Statistics (ABS) estimated there were already 1.7 billion litres already lying around hoping to be sold. Adding fuel to these concerns, according to the ABS, domestic wine sales fell by 6.4 per cent to 95.1 million litres in the March quarter, the biggest annual drop in 21 years.Commenting on the 2011 season, WFA chief executive Stephen Strachan said ‘The vintage is too big. A harvest of 1.6 million tonnes is out of step with the realities of sustainable production and the market opportunity for premium Australian wine’. Dead right. But what he didn’t add was how poor the likely quality is going to be. To achieve this remarkable but entirely unwarranted result, wine producers acted in ostrich-like fashion, ignoring the pre-existing global and national over-supply, ignoring the many challenges Australia faces in selling its lower-tiered wines in overseas markets, and opting instead to turn fruit from rain and disease-affected vineyards into the very kind of bulk slush that is diminishing Australia’s quality reputation in key export markets. In a few months, Australian producers have undone all their recent work in correcting this country’s oversupply.Back in 2009, the wine industry declared its intent to remove 20,000 hectares of vineyards. While it’s likely that only a third of this figure has so far been achieved, the 2011 vintage might prove the last straw for many producers, despite its size. Membership of the Murray Valley Winegrowers Association has however fallen from 1200 to a current number of 598. Chairman Dennis Mills expects it might lose another 200 members over the next year. Premium regions are also feeling the heat, with growers in Margaret River being forced to abandon their vineyards. Margaret River producers blame their drop in demand on intense competition from heavily discounted retailer own-brand wines and the high dollar’s effect on exports. The same strong Australian dollar is also hindering the sales of the steadily increasing number of wineries and vineyards in Margaret River for sale, despite a regular stream of potential buyers visiting from China.
