Australia: Boom to bust, and the journey back

The UK has traditionally been Australia’s strongest export market, and in volume terms it is still the largest, at 223m litres. But increasingly this has become about less expensive wine – 80% of this is shipped in bulk and bottled in market.

This is not necessarily bad for quality, but it shows that the demand is for affordable wine, the end of the market where margins are low. It’s not just in the UK, though, that private-label/own-brand wines have become far more prevalent and form the majority of most supermarket wine ranges.


The US, which suffered a large slump, is still a tricky market. Ninety-five per cent of sales in the US are of wines below A$5 per litre. The perception of Australian wine in the US needs some work.

In Australia itself, though, aside from the bottom end of the market, things seem very upbeat.

There’s never been more interesting wine being made here. And one region, in particular, gives a lot of cause for hope because of the way things have turned around. This is the McLaren Vale, which until recently was a relatively unpopular region that gave the impression of being off the pace.

And here, a once unpopular variety, Grenache, is experiencing a quietly dramatic revival. Grenache is one of the most widely planted red grape varieties, and has been successful in the warm, dry conditions found in the south of France and Spain. Even in warm climates, it keeps good acidity and grows well as an untrellised bush vine.

It was a popular choice in Australia, especially during the period of the mid-1920s to the late 1960s when the bulk of wine production was of fortifieds.

The shift to table wines from the 1970s onwards was bad for Grenache. Between 1979 and 2012 the harvest of Grenache fell from 72,000 tons to 15,000 tons in 2012.

As the area under vine in Australia increased, Grenache decreased to just over 1% with 1,500ha. The classic, warm regions of South Australia were forgotten a little as people’s attention turned to cooler areas. And even within South Australia, heads were turned by the bigger, more obviously fruity wines that could be obtained from Shiraz, and even Cabernet Sauvignon.

But its fortunes have seen a shift and people are now talking about Grenache. And the McLaren Vale winegrowers are beginning to realise that they have something rather special – quite a bit of old vine Grenache. The talent of Grenache is in making lighter-coloured, perfumed, elegant red wines, not lacking flavour, but with freshness and nice structure.

In terms of winemaking, techniques such as using some whole bunches in the fermenter and ageing in large format oak, or older oak barriques, seem to work well with this variety. The result is supple, often quite elegant reds that are highly food compatible and very drinkable. Now that winemakers are recognising Grenache’s talents for elegant reds, fewer are trying to force it into a style it’s not good at.


Some impressive examples of varietal McLaren Vale Grenache are emerging. On recent trips, I’ve enjoyed quite a few. Taras and Amber Ochota make one of my favourites. The Ochota Barrels Green Room is an old vine Grenache from McLaren Vale that is particularly haunting and elegant. Then there’s D’Arenberg – Chester Osborn is a champion of Grenache, which has always been the backbone of D’Arry’s Original.

“We have been a big instigator of Grenache in Australia,” says Osborn. “Dad made a huge reputation for his ‘Burgundy’, which had a lot of Grenache in it.” D’Arenberg buys up to half of the McLaren Vale’s Grenache, and makes five straight varietal wines and three GSMs. Osborn surprised many in McLaren Vale with the audacity of his new winery tasting room/visiting centre, the Cube, which even by d’Arenberg standards is crazily ambitious.

Toby and Emmanuelle Bekkers are also making a very impressive Grenache under their Bekkers label, and Peter Fraser at Yangarra is turning out some impressive Grenache from one of the world’s largest biodynamically-farmed vineyards. The Yangarra High Sands Grenache is priced at a premium, and demonstrates just how well Grenache can do. And a beautiful old Grenache vineyard planted in 1934 forms 80% of Noon’s haunting Eclipse, another McLaren Vale star.

There are many stories such as this in the current Australian wine scene. Will there be another boom and bust cycle? Hopefully lessons of the past will be learned, and the foundations of export growth are now a lot stronger than back in the noughties.

Challenges remain – in particular, converting bulk shipments destined for cheap private-label wines to more profitable branded product – but Australia’s wine sector has always been responsive and innovative, so signs are good.