Wine no longer enough, buyers want the backstory

Esther Han
Provenance: Buyers love to know, Tom Harvey says.
Provenance: Buyers love to know, Tom Harvey says. Photo: David Mariuz

When it comes to exports, South Australia's Barossa reigns supreme over every other wine region in Australia. Last financial year alone, it splashed the world with 12 million litres worth $110 million.

At a distant second comes SA's McLaren Vale, which shipped $65 million worth of mostly red wine. Over the past decade, China's demand for wine from this region went from negligible to accounting for a third of its exports, says Wine Australia.

South Australia snagged eight of the top 10 exporting regions last year, with Western Australia's Margaret River in third and Victoria's Yarra Valley in ninth place. The Hunter Valley was the best performing NSW region, in 16th position.

''Barossa and Napa [in California] are the two best known and recognised New World wine regions, more than Marlborough, Mendoza or any part of Chile,'' said Mike Veseth, American wine expert and editor of the blog The Wine Economist.

Australia's wine exports peaked at $3 billion in 2007 before the global financial crisis and the high Australian dollar ravaged sales. Total exports have fallen steadily since, with $1.7 billion of wine shipped last year, nearly matching 2001.

But Mr Veseth, also professor emeritus at the University of Puget Sound in Washington state, predicts an ''Australian resurgence''.

''Times are changing in the US market. Growth is in the premium and super-premium segments. This is a problem for Australia because for many American wine drinkers, 'brand Australia' wine is lower-priced commercial wines such as Yellow Tail,'' he said. ''But it is an opportunity too, because the new hot spots are exactly where Australia would like to reposition itself.''

Mr Veseth will speak at Australia's largest wine conference, the four-day Savour Australia 2013, on Tuesday. Savour begins in Adelaide on Sunday.

The Winemakers Federation of Australia is receiving feedback for its 33-point plan to restore profitability and create extra demand, released late last month.


It proposed a yearly $2 million injection into Wine Australia and opening a $4.5 million food and wine venue in Shanghai.

''It also includes re-engaging with American consumers, opinion leaders, and reminding them of the great value of Australian wine,'' chief executive Paul Evans said.

World demand for Barossa and McLaren Vale shiraz has not eased, and is strong in China.

Tom Harvey, third-generation winemaker and chairman of McLaren Vale Grape, Wine & Tourism Association, said: ''It comes down to wines of provenance and, with a story behind it, where the grapes come from and how it's locally unique.''

Riverina picks off Hunter Valley

For the past two years, the Riverina, in south-western NSW, has eclipsed the Hunter Valley in the export stakes. It shipped $6 million worth of reds and whites in the past financial year, surpassing Hunter Valley's efforts by $2 million. Wine export sales from NSW mirrored national trends, going into free fall because of the global financial crisis and the rise of the Australian dollar. The Hunter Valley was hit hardest with its overseas wine sales collapsing from 3.2 million litres, valued at nearly $20 million achieved eight years ago, to 700,000 litres worth $4.6 million in the past year. The Central Ranges has exported the most consistent amount of wine overseas, posting the third biggest shipment, worth $3 million, last year.