Viticultural Information

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Vintage 2018

The Winemakers’ Federation of Australia reported a total of 1.79 million tonnes of grape crush in 2018. This was a decrease of just under 200,000 tonnes or 10% from the actual crush compared to 2017 (Table 3, see page 3). The crush reflected a slight contraction within the industry after a record 1.99 million tonnes in 2017. However, the total winegrape crush for 2018 was still comparable to the average over the last 10 years (Table 3) and was still 2% above the long-term average of 1.76 million tonnes. This change reflected a return to relatively normal cropping levels after an exceptionally large crop in 2017 (Wine Australia).

Dry winter and lower cropping after a very successful yield in 2017 resulted in a lower harvest reported across most regions for 2018. The red crush decreased by 15% to an estimated 932,334 tonnes. The white crush also decreased although by a slightly more modest 4% to an equitable 861,848 tonnes in 2018. However while the total winegrape intake was smaller the average price increased by 8% in 2018 (Table 1, page 2).

The majority of red varieties decreased in volume in 2018, with Grenache slumping by 24% from the 2017 volume (Table 1). The top three red varieties by volume in 2018 were Shiraz, Cabernet Sauvignon and Merlot, together accounting for 84% of the total red crush. Shiraz continued to dominate at 46% of the total red crush, representing a decrease of 17% compared to 2017. Cabernet Sauvignon remained at 25% of the total red crush, with a decline of 14% in the total volume from 2017. Merlot represented 11% of the total crush in 2018 and saw a drop of 19% in total volume in 2018. A small increase (2%) was observed in Pinot Noir which was the only red variety in the top 10 to record an increase in tonnage in 2018.

Among the white varieties, Chardonnay extended its lead in overall white crush with an increase of 9% compared to 2017 to an estimated 407,940 tonnes, holding 47% of the overall white crush (Table 1). Sauvignon Blanc remained the second most popular white grape although the tonnage crushed in 2018 dropped by 16% to 92,610 tonnes (11% of overall white crush). This is closely followed by Pinot Gris and Pinot Grigio representing 8% of overall white crush in 2018.

The crush for warmer inland regions (Riverina, Murray Darling and Swan Hill and the Riverland) weakened by 5% from 2017 to a total of 1.3 million tonnes in 2018, representing 72% of the total 2018 crush (Table 2, page 2). In contrast, the cool and temperate winegrape intakes fell by 20% to a total of 0.5 million tonnes in 2018 (28% of the total crushed in 2018).

At the state level, South Australia continued to dominate with 49% of the national crush. Most regions in South Australia reported decreases in tonnes crushed, including the Barossa Valley (down 21%), Langhorne Creek (down 24%) and McLaren Vale (down 19%). The Riverland was relatively unaffected recording a decline of 5%, increasing its share of the state’s total crush from 54% to 60% in 2018.

In NSW, the overall crush increased 21% with strong gains around the Mudgee and Hunter Valley regions while Victoria dropped by 10%, accounting for only 5% of the national crush. WA decreased by 6%, while Tasmania was up by 28% and Queensland was down by 9%, representing a small proportion of the national crush.

The Winemakers’ Federation of Australia reported the total purchase value of fruit by respondents across all grape varieties grew by 8% to $609 per tonne in 2018. This was the highest purchase price since 2008 and well above the 10-year average of $508 per tonne. The overall average price for red grapes increased by 11% to $768 per tonne, while the average price for whites increased by 5% to $444 per tonne in 2018 (Wine Australia). Since 2011, the industry observed a divergence in price between the average price of red and white fruits with a stronger demand for red wine (Wine Australia).

Shiraz was the biggest driver in the overall increase in the average purchase price, with an 8% increase in 2018. Whites are more heavily weighted to the lower end of the price scale with a strong increase in the $300-$600 per tonne price bracket now accounting for 66% of total pricing in white varieties.

Vintage 2019 outlook

The 2018 Statistical Report on World Vitivinculture, published by the International Organisation of Vine and Wine, reported that the world’s largest wine producers, Italy, France and Spain, were estimated to have produced an additional 2.4 billion litres in 2018. This is roughly double the total annual bulk wine production in Australia. Hence, the influx of global supply is likely to cap price increases particularly when the Australian products are comparable within the commercial market.

Australian conditions have been drier than average this season in many winegrowing regions and this is likely to have an impact on the 2019 harvest. The Australian prices are holding up with strong demand from China and a favourable exchange rate, but international competition is likely to increase in the medium term as overall international wine supply pressures ease.
The continued rise of Australian Shiraz is evident with this variety taking up 46% of the red crush. The average price increase of 8% in 2018 (Table 1) showed strong demand within the market. Furthermore, Shiraz achieved a higher average price than Sauvignon Blanc ($18.11 per litre and $13.88 per litre respectively).

Over the past five years, Shiraz exports have grown from $389 million to $635 million (Wine Australia Market Bulletin Issue 137) equalling an annual growth of 10% for this red harvest whilst the total Australian export market increased by 8% over the same period.

The Chinese market is fuelling the increase in Shiraz exports with significant growth over the last five years. Approximately 94% of wines in volume imported into China from Australia were red wines. The average price of $5.71 per litre is comparatively higher than the overall export market average and China is the strongest market for our premium wines (Table 6, page 4). With government initiatives and continual exposure at trade shows, the industry should expect strong growth.

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