Fewer vines using more water, but there's a glut
VICTORIA'S wine regions are shrinking, but are using significantly more water than their peers in other states as a new grape glut emerges.
Figures from the Australian Bureau of Statistics show the amount of land dedicated to new vine plantings in Victoria shrank this year for the second year in a row as other states except Queensland increased theirs. Victoria's winemakers cut their total grape-producing land by 1200 hectares last year, a severe shrinkage compared with other states.
But Victorian vineyards used 4.1 megalitres of water a hectare compared with 2.7 megalitres a hectare in South Australia, which produces the country's largest wine grape harvest.
The water discrepancy shocked Yasmin Power, the food and wine sector manager for the Victorian Department of Innovation, Industry and Regional Development.
Ms Power said the Government had recently been partner with the Victorian Wine Industry Association in launching the first statewide audit of the industry.
The report, which will describe the characteristics of the industry from labour to water use, is expected in March.
Wine grape production was up nationally last year, but exports of Australian wine fell 9 per cent to 715 million litres.
Domestic sales also dropped, by 5 per cent to 426 million litres, leading to larger inventories of grapes.
The industry is only just recovering from a glut of wine grapes from a mass planting in the late '90s bearing fruit beginning in 2002. A hotter 2007 cut back production. But this year's crush rebounded, coming in 31 per cent larger at 1.8 million tonnes of grapes. This produced 1.2 billion litres of wine, up 27 per cent.
Meanwhile, winemakers are holding more stock than their local and overseas customers can drink. This is because wine production was up during 2007-08 but sales were down.
Australia produced 1.2 billion litres during the period — up nearly a quarter on the year before — from a total grape harvest of 1.8 million tonnes.
Red and rose wines made up nearly two-thirds of the stock.
Even with the higher production, winemakers are being squeezed on a new front: the global financial crisis.
Wine Group Australian Vintage last week flagged a major strategic review of its business as part of efforts to reverse its share price slump. Elsewhere, Foster's Group began a review of its $4 billion wine business in April.
With AAP