The annual Australia Day celebrations have reminded us about Australian wine again – and perhaps it’s useful to have a reminder this year, as Australian wines don’t seem to be as dominant in the marketplace as they once were. It seems like much more shelf space was dedicated to Australia a decade ago – perhaps our interest in Australia’s budget and mid-range wines reached its peak and then dropped off slightly as other wine-making nations emerged. That’s not to say that Australia’s wines are performing badly in the marketplace – their wine exports were up 14% in value last year, although this is not reflective of how they are performing here in the UK, where growth has been relatively slow at 0.2%.
A problem of perception
At the top end of the market, Australia still struggles slightly with how its finest wines are perceived, particularly in the on-trade where they are often under-represented in favour of their high-end counterparts from Europe. Australia’s fine wines are plentiful, and extend far beyond its most famous names, Penfold’s Grange and Henschke’s Hill of Grace. Unfortunately many of the top wines from smaller producers are yet to trickle through to the European market.
Australia’s climate is much more reliable than that of France and other leading Old World wine producing countries, nor have they struggled with drought like the Californians have done of late. That means there are no bad vintages to speak of, their best wines are consistently good and just as ageworthy as their Old World equivalents. There is also a good deal more freedom when it comes to deciding what grapes to grow and how the blend is made up. Some of the finest Australian wines are Bordeaux-like but with a proportion of Shiraz in the blend, a grape that is not grown in Bordeaux. Shiraz loves the Australian soil and adds weight, complexity and softness to the blend. Rhone-style blends are also common.
The best is yet to come
At the lower end of the market it is worth noting that modern Australian wines have much more subtlety and delicacy than earlier versions, and it is likely that the best are yet to come. At the top end, a recent free trade agreement with Korea has encouraged sales, and certainly it seems like the ‘buzz’ around Australian wines has been renewed. For investors, the message seems to be “watch this space”.