In our latest MW Perspectives essay, MW Annette Lacey explores the ways that the Australian wine industry has developed over the past three decades. Read the introduction below, or find the whole piece in our MW Perspectives section, available exclusively for GuildSomm members.
The Australian wine industry has undergone a great amount of change in a short amount of time. In the 1960s, Australia was a fortified-focused nation; fast-forward 60 years, and it is a burgeoning table-wine nation. The past three decades have been a particularly important period of development. Today, Australia is the sixth largest wine producer in the world, making 1.6 billion bottles per year, approximately 60% exported and 40% consumed domestically. While Australia is not considered an emerging market, it is also not a mature one when compared with Europe. Rather, Australia sits in the middle, still trying to shape its wine identity. A look back through recent decades will highlight both the steep learning curve the Australian industry has been on and the opportunities for development that remain.
In the 1960s, fortified wines dominated in Australia, accounting for a staggering 78% of consumption. British wine writer Oz Clarke comments, “Sunshine in a bottle is what Australia offered in the 1980s. Lovely, ripe, affordable grog.” These wines dominated the export market, eroding the advancement of quality wines—but they also opened the world’s eyes to Australia as a wine-producing nation. Abroad, the deep discounting in the United Kingdom, Australia’s key market, resulted in the degradation of price point and of the market perception of Australian wines at a premium quality level. There were also significant changes taking place domestically. Immigrants brought their food and wine cultures into Australia, women began taking a more active role in wine-purchasing decisions, and wine was becoming a lifestyle product. The market began shifting from fortified to table wine, a change that would shape the next three decades.
In the 1990–2000 decade, government strategies worked to cement the future of Australian wine. Output was maximized with the help of the big wine company model that dominated the Australian wine landscape at the time. The top four wine brands were the Penfolds Wine Group (renamed Southcorp in 1994; Southcorp and Rosemount merged in 2001 to become the brand eventually known as Treasury Wine Estates), BRL Hardy (which became Constellation Australia and is now known as Accolade), Orlando Wyndham (acquired by Pernod in 1989), and Mildara Blass (which became Fosters in 1996 and Treasury Wine Estates in 2010). The top four were responsible for 76% of Australia’s wine output, followed closely by the family-owned brands McWilliams, Yalumba, and De Bortoli. Together, these seven companies recorded AU$87 million in profit and controlled 90% of the market, with the remaining 10% left for Australia’s 600 smaller producers.
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Interestingly, the study guide states that Australia is number 7. However, Argentina, Australia, South Africa and Chile are relatively close with the U.S. as a very firm number 4, about doubling any of those country's production. France, Spain and Italy more than double the U.S.