The extraordinary international growth of the Australian wine industry over the past decade -- during which it made sizable inroads into the North American market and surpassed France as the largest source of wine in the UK -- has caught up with growers and winemakers. Blair Speedy -- and isn't that a proper name for an Australian journalist? -- reports for The Australian:
Growth in exports and domestic consumption has slowed, grape prices have crashed and growers contracts have been cancelled as the industry wrestles with a problem that echoes the famous European wine lake of the early 1990s.
Australia already has a surplus of 900 million litres of wine - enough to fill 300 Olympic swimming pools or pour 7.5 billion standard glasses.
It's a massive hangover after a decade of booming growth in the wine industry and one that is causing as big a headache for all involved as you might get from the only other solution to the problem: drinking it.
Indeed, that is the solution that the federal Government appears to be advocating, telling the industry this week that rather than seeking handouts it needs to work on demand-side solutions. Drinkers are the only real beneficiaries of the grape glut. Boutique wineries are selling their $50-a-bottle pinot noir as $15 cleanskins and even the largest groups, such as McGuigan Simeon, have had to slash the value of their inventories.
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Over 10 years, Australia's vineyards have more than doubled in size to 154,000 ha, and are now producing about 2 million tonnes of grapes a year, up from 883,000 tonnes in 1996.
We weren't alone. Winemakers in North and South America and South Africa - quaintly referred to as the 'new world' in the Eurocentric globe of wine terminology - ramped up their production.
And while Australian wine may have retained an edge over the rest of the new world in terms of quality, its affordability has taken a battering as the Australian dollar has risen more than 50 per cent in the past five years - a significant headwind when you consider the low labour costs available to producers in South America.
The whole article is well worth your time, especially the anecdote at the end about the great vine-pull of the mid-1980's. [Link via Colby Cosh's constantly-interesting-if-irregularly-posted International Press Roundup.]
This time last year, it was the French who were suffering from excess production, and I had a helpful suggestion for them:
Some aspiring French entrepreneur needs to emulate California's Fred Franzia and his Charles Shaw brand, better known as "Two Buck Chuck." Buy up all that excess supply, especially that "supposedly medium quality" Bordeaux. Bottle it. Sell it at an absurdly low price to thirsty French and Americans. Give the product a sunny Gallic brand name such as "Bon Francois," then -- and this is the critical bit -- let it become known by the perfect snappy nickname, one that harks back to those halcyon, romantic days before the adoption of the Euro. I refer, of course, to . . . "Deux Franc Frank!"
The same notion ought to work for our Australian friends: sell it all to the Trader Joe's stores and let them market it cheaply, perhaps with a cuddlesome eucalyptophiliac marsupial on the label. Yeah, that's it: We can call it . . . Two-Dollah Koala!