The Australian wine industry

Australian wine has won an international reputation for quality and value. Australian wines have taken key international awards, competing favourably against longer-established national wine industries. Innovative Australian winemakers are sought internationally for their expertise.

Australia produces a full range of favoured wine styles from full-bodied reds and deep fruity whites through to sparkling, dessert and fortified styles. Prized Australian bottlings grace the menus of many of the world's leading restaurants, while popular varietal and blended wines compete on the shelves of wine shops and supermarkets in some 80 countries around the world.

In global terms, Australia was ranked 7th in the list of world wine producers in 2003, producing 1,085 million litres of wine.

The Australian wine scene

Wine-grape growing and winemaking are carried out in each of the six States and two mainland Territories of Australia. The principal production areas are located in the south-east quarter of the Australian continent, in the states of South Australia, New South Wales and Victoria.

The older-established concentrations of productive wineries in South Australia's Barossa Valley, in the Hunter River region north of Sydney in New South Wales and in Victoria played a major role in the development of the industry and continue to be important sources of fine wines. However, wine is produced in over 60 regions, reflecting the wide range of climates and soil types available in the continent. These include areas such as Mudgee, the Murrumbidgee and Murray River valleys (New South Wales); the Southern Vales, Clare Valley and Riverland (South Australia); and Rutherglen and Yarra Valleys (Victoria). The States of Western Australia, Tasmania and Queensland have smaller wine industries, which have grown rapidly in volume, quality and reputation. The Canberra region, near Australia's national capital, has a recognised cool-climate wine industry.

A generous range of grape varieties goes into the making of Australian wine. In 2003-04 Shiraz was the most-produced variety, followed by Chardonnay and Cabernet Sauvignon. Premium white varieties other than Chardonnay include Semillon, Riesling and Colombard. Main red wine varieties other than Shiraz and Cabernet Sauvignon include Merlot, Grenache and Pinot Noir.

Wine is very much a part of Australian life, closely associated with both business and leisure. Wine consumption is often linked to the country's outdoor-oriented lifestyle as well as to the cosmopolitan urban way of life of the bulk of the Australian population.

Wine festivals are a feature of cultural life in the major wine producing regions of Australia and draw many Australian holidaymakers and international visitors each year.

The Australian wine story

The first vines arrived with the first European settlers to Australia in 1788. Initially wines were produced in the coastal region around the fledgling city of Sydney. John Macarthur established the earliest commercial vineyard.

In 1822 Gregory Blaxland shipped 136 litres of wine to London, where it was awarded the silver medal by the forerunner of the Royal Society of Arts. Five years later a larger shipment of Blaxland's wine won the gold Ceres medal.

Planting of vines accompanied the spread of European settlement across the Australian continent, and by the beginning of the 20th century Australia was exporting some 4.5 million litres of mainly full-bodied dry red wines to the United Kingdom.

The end of the Second World War saw a rapid influx of migrants from Europe who brought with them a strong culture related to wine. This provided an important impetus to the Australian wine industry.

However it is the period 1996 to 2004 that has seen spectacular growth in exports following rapidly increasing appreciation of Australian wines overseas. Major wine producers from abroad have invested in Australian wineries and Australian companies have taken controlling interests in wineries in countries such as France and Chile.

The Wine Economy

In 2003-04 sales of Australian wine totalled approximately 999 million litres, with 414 million litres sold domestically and 584 million litres exported. Australian wine exports were worth $2.5 billion, with represented an increase of 12.7% over the previous year. The principal destinations were the United Kingdom, the United States, New Zealand, Canada and Germany.

Australia's largest wine export market in 2003-04 was the United Kingdom (221 million litres worth A$836 million), closely followed by the United States of America (166 million litres worth A$838 million). Wine production is a significant industry in Australia. It directly employs 30,000 people in both winemaking and grape growing (2001 Census), with further related employment in the retail, wholesale and hospitability industries.

Tourism adds another dimension to wine's importance. International and domestic tourism related to the wine industry accounts for an important share of Australia's export earnings, employment and taxation income.

During 2003-04 the industry crushed 1.92 million tonnes of grapes to make 1,424 million litres of beverage wine. In 2004 total wine grape vineyard area reached 151,000 hectares of bearing vines, with a further 13,500 hectares of non-bearing vines. The area of bearing vines has more than doubled since 1996 -97.

In 2003-04 the domestic market accounted for 44% of total sales of Australian wine. Table wines made up 87 per cent of consumption of local wines, with sparkling wines accounting for 8 per cent and fortified wines 5 per cent.

Regulation, structure and research

Australia maintains national standards for wine which are administered by State and Territory governments. Federal regulations focus on quality control. The Australian Federal government assists the industry by improving the trade environment (redressing barriers to trade) and by improving the domestic economic operating environment. Policy issues are the province of the Australian Government Department of Agriculture, Fisheries and Forestry.

The Australian Wine and Brandy Corporation promote and control the export of grape products including wines.

The Grape and Wine Research and Development Corporation (GWRDC) is the body responsible for investing in grape and wine research and development, on behalf of the Australian wine industry and the Australian community.

Australia's reputation as one of the most technologically advanced wine-producing nations owes much to the industry's emphasis on research and development (R&D). Key R&D sources include the Australian Wine Research Institute, the Commonwealth Scientific and Industrial Research Organisation, the Cooperative Research Centre for Viticulture, State departments of agriculture and universities. A number of Australian universities and other tertiary education institutions offer courses in viticulture and oenology.

Issues which impact on wine industry R&D include a wide range of social and environmental considerations as well as economic issues.

The peak industry body representing the interests of Australia's winemakers is the Winemakers' Federation of Australia which develops policies and programs to increase the nett returns to Australian wine makers. The National Wine Foundation is an industry-sponsored organisation promoting moderate wine consumption and research into wine and health.

Further Information

Department of Agriculture, Fisheries and Forestry www.daff.gov.au

Australian Wine and Brandy Corporation www.awbc.com.au

Australian Grape and Wine Research and Development Corporation www.gwrdc.com.au

The Australian Wine Research Institute www.awri.com.au

For further information about other aspects of contemporary Australia, go to www.dfat.gov.au/facts/index.html