Chile's quake-hit wines, Australian wine share may rise in China

Wynns Coonawarra chief winemaker Sue Hodder sayst he top vineyards are still in demand. Picture: Alice Prokopec

CHILE is one of Australia's biggest competitors in the market for "new world" wines, but the destruction of 125 million litres of the South American nation's wine in last month's earthquake isn't expected to solve the Australian industry's chronic oversupply problems.  

Industry association Vinos de Chile has revealed $US250 million ($272m) worth of wine was destroyed in the quake, raising the prospect for Australian exports to poach market share in destinations such as China, the fastest-growing market in the world, where Chile's wine is the top seller.

However, the lost wine amounted to just 12.5 per cent of last year's billion-litre vintage, leading VDC president Rene Merino to predict that deliveries would quickly return to normal.

The Winemakers Federation of Australia estimates that Australia has a surplus of about 1 billion litres of wine, and produces another 200-400 million litres a year that can't be sold, forcing prices down.

Jim Moularadellis from wine broker Austwine, said: "Nobody in the chain is making money, but the consumer is winning and possibly the retailer may be doing well but nobody else is happy."

However, the Australian Bureau of Agricultural & Resource Economics expects this year's vintage to be down about 20 per cent from average levels to 1.6 million tonnes, helping to cut the surplus.

Sue Hodder, chief winemaker at Wynn's in South Australia's Coonawarra region, said her production this year would actually be bigger than last year's, when frosts reduced the amount of fruit that survived to ripeness.

"It's looking like being an average year - we're looking like being back on track after some beautiful spring rains," she said.

Unlike the warm inland areas that account for the majority of Australia's wine production, Ms Hodder said there was little excess fruit in Coonawarra.

"Some producers have more grapes than they prefer, but the top vineyards are still in demand," she said.

She added that cabernet sauvignon, the region's best-known varietal, still sold for thousands of dollars per tonne unlike the $200 or less price tage that inland-grown fruit has commanded in recent years.