New Emissary

Grape Glut

Supply outweighs demand in Australia & winemakers resort to pulling the…vine.

There have been some major trend waves rising in the international wine industry, and they likely won’t be calming down any time soon. I’ve mentioned a couple of these in the past year, especially the rise of China as a wine consuming ‘superpower,’ and the growing number of women both as consumers of wine and working within the industry.

Unfortunately, there are also some strong undercurrents wreaking havoc on international wine producers and distributors alike, particularly in New World regions like Australia and the United States.

In Australia, the situation seems particularly dire; a recent article in the Sydney Morning Herald calls the current wine market situation there a ‘crippling grape glut that has slashed vineyard valuations and pushed many winemakers into losses.’ Indeed, thanks to the global recession, a lower Australian dollar and supply currently far exceeding demand, this is a major problem for the industry—one that the paper also reports could take up to three or four years to rectify. And the immediate solution now seems to be quite drastic: to cut (literally) the supply.

One prominent member of new wine collective Australia’s First Families of Wine (AFFW)—which is said to be attempting to save Australia’s fine wine industry—has spoken out on the issue. Doug McWilliams, from the renowned McWilliam’s Wines Group, has been quoted in the press recommending that 25 percent of Australia’s grape vines be pulled out now to ensure the future of fine wine in the country.

This situation is reminiscent of dairy farmers in Belgium last year who dumped milk by the gallons to protest the plummeting value of their product—reminding us what can happen in an increasingly interconnected, shrinking global marketplace for consumables.