David LeMire MW
7 October 2010 | David LeMire MW

Too Many Wine Producers?

I’ve never felt entirely comfortable with the idea that we have too many wine producers in Australia. It has become common over the last 10 years for commentators to express concern at the growing number of new producers in an industry that appears to be saturated.  When so many of our wine businesses are barely profitable, and some downright unprofitable, is it sheer folly for people to keep throwing their hat into the ring? 


On one level, it is, or it can be, a folly. But it is important to make a distinction between new producers, and new vineyards. Many new entrants, indeed the vast majority of late, are not planting new vineyards, but are sourcing from existing vineyards. What the current growth in the number of wineries in Australia amounts to is a fragmentation of the industry. This has some downsides but it is by no means all downside. There is potential upside in fragmentation as well, if we consider the big picture of the Australian wine community.


An exercise I did recently for a new Pinot Noir themed website involved comparing a dozen of the best red burgundy producers. (The regular reader(s) of this column will realise that I often look to burgundy for inspiration, and some may suggest that burgundy doesn’t hold all the answers for us in Australia – enough, of course it does). Anyway what interested me is that of the dozen top producers I looked at, 10 of the 12 have less than 20 ha, and the other 2 (DRC and Leroy) have less then 30 ha. Admittedly there are many different factors that have influenced the evolution of burgundian domaines. Still, it says something that the greatest wines are coming from domaines that in Australian terms would be considered small.


Another comparison I want to mention is that between Italy and Australia. Angelo Gaja told me a couple of years ago that Italy had too many wineries and needed some rationalisation.  The number of registered wineries at the time – about 44,000. Given that Italy makes about 5 times as much wine as Australia, if we had a similar number of wineries in relation to our volume, we would have nearly 9,000 wineries, which makes our 2,500-odd seem a pretty modest number.  Whilst I’m not suggesting that we need any more vines, or that we need 9,000 producers for that matter, the number of wine producers continuing to creep up doesn’t strike me as cause for alarm. The new entrants provide new enthusiasm, new ideas on style and quality, and the best ones are important in keeping the wine sector exciting for consumers, buyers, and wine writers. They also add their marketing ideas, their contacts, their efforts, and their intellects to the job of selling Australian wine. When I think about some of the recently minted brands, names like Jamsheed, Head Wines, Ducks in a Row, Beach Road, Dandelion, Serrat, and Ocean Eight, I’m certain that they are part of the solution rather than adding to the problem.



There’s been a bit of noise of late about the rise in popularity of imported wine, and whether it is getting out of hand.  A recent letter from a highly regarded winemaker urged fellow winemakers and wine show judges to drink Australian wine exclusively for a month. Similar sentiments have been expressed on twitter. As much as I love good Australian wines, I won’t be going without Chablis and Barolo for a week, let alone a month. My contention is that a winery, like, say, SC Pannell, has more in common with Descendientes de J. Palacios than with Yellowtail, and more in common with Isole e Olena than with Rosemount, especially given Rosemount’s recent fruity adventures.  So if we want to be loyal to our own kind, I think the way to do it is to drink the wines of people who make wines that we want to drink, and who can give us inspiration, rather than be constrained by borders. I’d also argue that the embracing of imported wine, in particular by the winemaking community in Australia over the last 10 years, has given great impetus to creativity and quality in Australian winemaking.


First published in WBM - Australia's Wine Business Magazine.


Time Posted: 07/10/2010 at 11:27 AM Permalink to Too Many Wine Producers? Permalink