Too Much of a Good Thing

Australia has too much wine. According to this article in Wine Economist (yes, there is such a magazine), the wine glut Down Under has risen to 100 million cases, and that number is projected to double in the next two years if demand doesn’t increase. According to a joint report released by two days ago by four Australian wine industry groups:

Structural surpluses of grapes and wine are now so large that they are
causing long-term damage to our industry by devaluing the Australian brand,
entrenching discounting, undermining profitability, and hampering our ability to
pursue the vision and activities set out in the Directions to 2025 industry
strategy.

Coupled with inefficient and/or inappropriate vineyard and wine
operations, oversupply is amplifying and exacerbating fundamental problems in
the industry, notably our decreasing cost competitiveness. As such it is
compromising our ability to adopt new pricing structures and market solutions
and adapt to changing market conditions.

Comprehensive analysis and consultation suggests at least 20% of
bearing vines in Australia are surplus to requirements, with few long-term
prospects. On cost of production alone, at least 17% of vineyard capacity is
uneconomic.

These structural problems in Australia echo those experienced in France a few years ago. You may remember reading about the massive amounts of fine Spanish and French wine being turned into industrial fuel. As a wine lover, this kind of news make my heart sink. You spend your hard-earned money on a well-crafted bottle, savoring every drop, only to read about 100 million cases of the stuff that could very well end up being destroyed. The E.U. implemented some changes to their system. Hopefully, the Australians can pull things together to stem their oversupply tide before their wine industry collapses.

In the meantime, I’m going to do my part in whittling down the oversupply by doing a blind tasting of Australian Shiraz tonight. Results will be posted here tomorrow.