Australian wine industry confronts a reckoning amid two-billion-litre surplus

Last week I told you all about Australia’s best wines – but I was only telling half the story. The truth is, there are long-term structural issues with Australian wine, and now a reckoning is upon us.

The Australian Weekend Magazine wine writer Nick Ryan. Picture: Bri Hammond

These are Dickensian days for ­Australian wine. The best of times. The worst of times. The dichotomy is head-spinning.

Readers of The Australian will have hopefully enjoyed our coverage this past weekend of the nation’s Top 100 wines.

The quality and diversity of this list is something any wine-producing nation would need to work hard to match. The depth is there too. I could delete every one of the 100 wines and replace it with another and still be happy to stand by what made it to these pages.

We should be swinging from the rafters and shouting from the rooftops about the best Australian wines. But invite a bunch of winemakers over to help you do that and you’ll seriously think about hiding the sharp objects.

There are long-term structural issues with Australian wine. They’ve been dismissed for years but now a reckoning is here. The 2025 harvest was up 11 per cent on last year, the kind of result any other agricultural industry would celebrate. But when that increase flows directly into an ocean of excess wine, about two billion ­litres of it, abundance becomes a real problem.

Shiraz has regained its place as our most ­prolifically planted variety, having briefly lost its crown to chardonnay. It’s a dubious achievement, given most growers will tell you it’s easier to sell sandpaper underwear than shiraz in this market, and the stock-to-sales ratio for red wine in Australia currently sits at around 2.5:1. That a recalibration is coming is undeniable.

If I truly understood numbers I’d be making proper money as a banker, not slaving away as a wine writer, but even I can see the imbalance here. As a winemaking country we have to ask ourselves What, Where and Who.

What kind of wines should we be making here? Where are the places that will grow them best? And Who is going to drink them?

China will never be what we once thought it might, writes Nick Ryan. Picture: Bri Hammond

The first question requires splitting Australian wine into several tiers. Commodity wine, premium wine and fine wine. We can continue to produce all three, but need to seriously think how sustainable the industry can be when so much is made in bulk.

That ocean of excess wine isn’t made up of bottles of Henschke Hill of Grace or Leeuwin Estate Art Series Chardonnay. Nor is it pallet after pallet of the Balnaves Blend from Coonawarra that at $19 a bottle delivers the biggest bargain on this year’s list. It is overwhelmingly commodity wine, and while nobody’s suggesting we stop making it, we might want to consider making a good deal less. Wine is the ultimate discretionary spend and it’s produced on good agricultural land that could perhaps be better used to provide the one thing that is anything but ­discretionary. Food.

That we need to focus on premium and fine wine seems obvious. This year’s Top 100 list is just a taste of what’s possible when we do. And it’s looking through that list, with some of the greatest chardonnay on the planet, grenache that is changing the way the world sees the variety, a compelling cohort of wines made from lesser-known varieties that show how Australian wine always seeks to evolve, and so much more, that I find the faith to believe these headwinds can be navigated and a significant period of prosperity for Australian wine lays ahead.

Green shoots are appearing in traditional ­export markets that had gone cold, thanks ­entirely to the quality of our best wines. China will never be what we once thought it might, but there remains opportunity, and the bruising past few years have ­hopefully got Australia’s winemakers thinking a ­little more about eggs and baskets.

Every other wine producing country on Earth receives greater loyalty from allies in hospitality than Australia.. Picture: Bri Hammond

I don’t fear the much-discussed abstemiousness of younger generations as others do. This is a cohort who think deeply about provenance and artisan craft. They take seriously how they eat. These are people who want to hear how what they ­consume has been made. They will drink, but what they drink needs fit their view of the world. Our best wines do exactly that.

And I hope one last baffling hurdle for Australian wine can be cleared. Every other wine producing country on Earth receives greater loyalty from allies in hospitality than Australia. Have dinner in a restaurant in Chablis and you’ll struggle to find a bottle from Alsace, let alone Beechworth or Clare. Have dinner in a restaurant in Melbourne and once you raise your eyes from the extensive Chablis section of the list, you look around and see most of the ­tables around you have ordered the stuff too.

In an industry where menus inform you the vegetables on your plate were grown in the kitchen garden, the honey drawn from hives on the roof, the fish caught by the boat you see out the window and the lamb was once a family pet called Cletus, hyper-local is an idea yet to make it to the wine-list.

But all this will pass. The fact we’re making the best wines we’ve ever made in this country surely means it has to.