Why now’s the time to buy SA wine

SOUTH Australian wine lovers have been spoiled for choice when it comes to affordable, good quality wine for the past decade — but prices are set to rise, industry insiders say.

Nicole Carlson and Siddhartha Kaul enjoy a drink at the Strathmore Hotel in the city. Picture: Tom Huntley

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SOUTH Aussie wine lovers have been spoiled for choice when it comes to affordable, good quality wine for the past decade — but the time is now right to stock up on favourite drops, industry insiders say.

As part of The Advertiser and Sunday Mail’s Cost of Living: Decade of Difference series, we can reveal the price of wine has risen by just 7.3 per cent in the past 10 years, which is well below the state’s overall CPI inflation of 25.1 per cent.

Over the same period, beer has jumped by 37.4 per cent while spirits are up 35.6 per cent. Professor Kym Anderson from the University of Adelaide’s Wine Research Centre says oversupply has kept prices subdued in the last 10 years.

“We reached a point in about 2007 where our industry had expanded fourfold over the previous two and a half decades … (on top of that) the export price fell away also,” he said. “There was a lot of wine that growers just couldn’t shift so it went into storage … (what followed) was a decade of very substantial discounting where consumers have been able to buy a particular quality of wine at reduced prices.”

However, he tips that’s about to change.

“We’ve now reached more of a balance between supply and demand in the wine industry and I’d expect to see a return to normal rates of increase, similar to what we’ve seen in beer and spirits,” he said.

Professor Anderson said the buoyant export market was one sign price increases were imminent.

“You look at the export prices, when those prices go up you tend to see the price of grapes go up … so it went downward for a decade but is now just turning (and) a lot of that is being driven by China,” he said.

Another sign is an increased demand for vines at nurseries, Professor Anderson says.

Mark Dimberline, Sales and Marketing Manager at fifth-generation SA family wine business Leconfield and Richard Hamilton, said there were promising signs for a positive turnaround for local wine producers.

“The trends come and go, at the moment wines out of McLaren Vale are quite popular,” he said.

“I think the future is quite bright for South Australian wine.

“We have a fantastic reputation out there whether that be McLaren Vale, or the Barossa or Coonawarra, and the export market is picking up, particularly in Asia. China is through the roof, Japan is growing strongly.”

“There is one thing you can be guaranteed when you buy any Australian wine — but particularly South Australian — if you are paying $12 or $15 or $30, you are always going to get value for money.

“Just because it is inexpensive doesn’t make it cheap … the consumer is the winner on that side of things.”

Mr Dimberline said local producers were increasingly trialling different varieties.

“We are seeing a growing trend towards European varieties such as Barbera, Pinot Gris, Fiano, Picpoul and Nero d’Avola.

“Coriole’s Mark Lloyd is a leading trendsetter and probably the pioneer in South Australia when it comes to bringing in new vine cuttings.”

Options Wine Merchants managing director Steve Twelftree said in 2018 it was all about quality — when it came to beer, wine or spirits.

“Essentially craft beer has exploded and with that the associated demographic are willing to drink less but drink better.

“Premium spirits have also enjoyed a significant growth.

“Wine is an age old product and as such it grows at a more steady, albeit slower pace.

“(In terms of wine), our biggest sellers are sparkling and Shiraz in volume. Interesting varieties on the move are Pinot Gris — as opposed to Pinot Grigio — Pinot Noir and Nero d’Avola.”

The Smiling Samoyed brewery at Myponga is part of South Australia’s burgeoning craft beer culture. Picture: Campbell Brodie.

Craft beer drives prices up

THE explosion in craft beers is helping to push up the overall price of beer in Australia, a leading Adelaide academic says.

Professor Kym Anderson from the University of Adelaide’s Wine Economics Research Centre describes the trend as the “premiumisation” of beer and says it is mirroring what happened in the wine industry several decades ago.

“There was a time when (in terms of quality) half the world’s wine was a dollar-per-litre junk but that sort of stuff has almost disappeared — there’s been a premiumisation in terms of the quality range,” he said.

“We’re no longer producing those big casks of cheap wine.

“The same is now happening with beer and spirits.

“There are small breweries, distilleries and ginneries going up everywhere … little companies are popping up in Tasmania, on Kangaroo Island at McLaren Vale and so on.”

Professor Anderson said the increasing popularity of craft beers wasn’t just happening in Australia but was “a global phenomenon”.

“People have got sick of the boring stuff produced by the big brewers and are looking for alternatives,” he said.

“The beers are selling at twice the price of regular beer and that is helping to push the price of beer up: significantly, the percentage of this premium-type beer is no longer trivial.”

Watch the local spirits space as well, he suggested.

“Some of these spirits coming out from the whiskey distilleries are selling at $500 to $800 a bottle, so that is also pushing up the overall price of these spirits.”

Professor Anderson is co-author of the Global Alcohol Markets: Evolving Consumption Patterns, Regulations and Industrial Organisations paper.

In it, he reveals how alcohol consumption has changed worldwide.

“Wine’s share of the volume of global alcohol consumption has fallen from 34 per cent to 13 per cent since the early 1960s, while beer’s has risen from 28 per cent to 36 per cent (and) spirit’s share has gone from 38 per cent to 51 per cent,” the authors write.

“In litres of alcohol per capita, global consumption of wine has halved while that of beer has increased by 50 per cent.”