Whither Australia’s wine industry

The Australian wine industry has a vision “… that by the year 2025 the Australian wine industry will achieve $4.5 billion in annual sales by being the world’s most influential and profitable supplier of branded wines, pioneering wine as a universal first choice lifestyle beverage.”

Presented in an elegantly written document, “The Australian Wine Industry Strategy 2025” – released at Wine Australia two weeks ago – the vision comes at a time of unprecedented investment, growth and change in Australian wine production. But “you ain’t seen nuthin’ yet” is the other message.

Suggesting as it does that Australia’s wine output might double in the next thirty years – after having almost tripled in the preceding thirty – the vision prompts further crystal ball gazing on behalf of wine drinkers? There are mixed portents.

Who can quibble at the prospect of twice as much wine? Not me. The table’s set and the glasses are polished and waiting at Chateau Shanahan. There’s nothing but good news to announce as old areas expand and the bold and brave move on and out. Who knows what the wine map might look like in 2025:

Canberra’s broad-acre plantings have converted last century’s obscure brands into household names across Australia (and an ageing Ken Helm, having outlived his critics, says, “I told you so.”)

Coonawarra and Padthaway’s 100,000 tonne grape output makes up less than a half of the total from the recently re-named Coorong Plains (formerly Limestone Coast). But prices of their wines now outstrip those of Bordeaux in New York and London.

‘Riverland’ is no longer a dirty word to wine lovers. Judicious watering, conservative vine management and a shift to lower-latitude stretches of the Murray – in the vicinity of Seppelts Barooga, NSW, vineyard – mean an endless supply of rich, warm wines at the right price.

Two of the big four wineries that controlled 80 per cent of production in 1996 have been absorbed, along with many other middle and small-sized wineries, into just three massive producers (one of them a newcomer) controlling 90 per cent of the market.

Rationalisation of wineries accelerated a similar concentration amongst retailers during the late 1990s and early 21st century. By 2025 wine retailing is dominated by the large national chains, each now with its own direct marketing arm.

Direct marketing exploded with the increasing effectiveness and reach of interactive electronic media. This changed the retail game considerably and resulted in increased competition for the consumer dollar. In this state of flux, new opportunities were created.

The dark horse to emerge from the ruck was Cellarmaster Wines. Privately owned and the fifth largest winery (in dollar value of sales) in 1996, it went public then punted all on emerging electronic marketing in the late 1990s. It burst into the new century as the nation’s third largest producer, selling every drop direct to the public!

The other two massive producers were faced with a conundrum and failed to resolve it. If they followed suit and exploited the new media to sell direct to the public, they would certainly alienate retail customers. They hesitated and the horse bolted!

Electronic marketing also saved the bacon of small makers, threatened initially by the demise of independent retailers. By 2025 their numbers swell from the 888 of 1996 to over 2000. These entrepreneurs continue to pioneer new growing areas, carving a niche for themselves by selling direct to discerning drinkers worldwide over the interactive cable systems.

Australia’s last wine cask was produced in 2015, completing a long-term consumer trend towards better quality wine and lower alcohol consumption. More people enjoy wine more often – and reap the health benefits of moderate consumption.

But a reaction to social and legislative pressure for moderation in all things led to the founding of what many thought was a crazy fringe group – the Drinkers Party – drawn largely from the ranks of retired political journalists and wine writers. The group demonstrated a surprising clout in returning a representative to the upper house of the New South Wales parliament in the 2024 election.

Back in 1996, many wine drinkers express concern at Fosters’ swallowing Rothbury, and at Southcorp’s digestion of Coldstream Hills — the latest victims in the rationalisation game. But the game is not over yet.

Rationalisation will inevitably continue. But the sheer pace of growth, which the “strategy 2025” suggests might continue for another generation, promises great diversity for the future. Old habits and ways might die, but the sheer vigour of the wine industry combined with the open competitiveness of distribution and retailing – now being spurred on by new technology – gives us wine drinkers every reason to believe the future may be as rosy as the past.

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