THE LONG DINNER TABLE is covered in a forest of wine glasses and bottles, deep bowls of hearty stew, mountains of crusty bread. Winemakers, grape growers and cellar door staff crowd round the table, sharing their end-of-vintage feast. It’s a ritual celebrated in every wine region in the world. Because we’re in a candlelit barrel cellar at the 130 year-old Baileys winery at Glenrowan in north-east Victoria, this particular celebration feels ancient and timeless.
There’s laughter bouncing off the barrels tonight. Of course there is: the wine is flowing, old friends are catching up and swapping stories, new friendships are forming. But behind the laughter, in the flickering light, I see faces scarred by trauma, deadened by despair.
This wine community has endured a nightmare of a growing season over the last nine months. After a bone-dry winter in 2006, devastating frosts swept through the region in October and November, destroying most of the fragile crop of emerging grapes.
The same drought and frost conditions also affected many wine regions in south-eastern Australia and cut the national grape harvest to 1.3 million tonnes - a whopping 30 per cent down from the 1.9 million tonnes picked in 2006 and the smallest harvest since the turn of the century.
But the vintage was particularly bad here in Victoria’s north-east. Just as producers were coming to terms with their crop losses, they were king-hit by the grape-growing gods: mighty raging bushfires over Christmas blanketed their vines in acrid smoke - which in turn tainted the few remaining grapes and made much of the resulting wine both undrinkable and unsaleable. Some lost 50 per cent of their production; many unlucky souls lost 80 per cent or more.
Some, like Arnie Pizzini of Christmont Wines in the King Valley, lost everything.
‘There won’t be any Chrismont wines from 2007’, says Pizzini. ‘None. We lost 75 per cent of our crop to that big frost in November. We’ve been growing grapes since 1980 and I’ve ever seen anything like it.’
And then it got worse. ‘The fires started in our area on December 2, and went until the 20th of January. They came right up to the boundaries of both of our vineyards. We had fires on our doorstep at Christmas. We didn’t have a Christmas.’
Pizzini found that the smoke taint made his few remaining grapes taste like old fag butts. So he took the difficult and drastic decision to sell what he eventually picked - about a tenth of his normal crop - to Casella, the large Riverina-based producer of Yellow Tail wines; his tiny amount of smoke-tainted fruit, along with grapes from many other growers in Victoria’s north-east, will easily be lost in Casella’s vast ocean of taint-free wine due to be shipped to the United States later this year.
For a relatively small wine company like Christmont, this outcome is nothing short of a disaster. ‘It’s had a phenomenal impact on our business,’ says Pizzini. ‘We still have quite a few red wines from the 2004 and ’05 vintages in barrel and bottle that we can sell, so that’ll soften the blow. But it’s the whites that are in demand. We’ve sold out of the 2006 pinot grigio, for example, and should have been releasing the ‘07 about now. That’s 3,000 cases of non-existent wine - $400,000 of lost turnover just from not having one product, let alone all the other varieties in our range.’
Incredibly, though, Pizzini can see an upside to this awful situation. Making wines under the Christmont label is only one part of his business: in a normal year, he sells the majority of the grapes he grows to other wineries. And he’s positive about the future: ‘Because of this year’s drought and frosts and fires, there will be a shortage of grapes next year and the year after,’ he says. ‘Which means prices we growers can get for our grapes should go up.’
Arnie Pizzini is not the only one who sees the 2007 vintage glass as half-full. Amazingly, across the industry, from bottle shops to cellar doors, in large wineries and small, people are calling this shortfall a blessing in disguise - nature’s way of eradicating the glut of wine that’s plagued the industry for years, and an opportunity for everyone to take stock, re-assess the situation and plan for a more sustainable future.
THE SHELVES in Cloudwine, a small independent grog shop in South Melbourne, are jam-packed with bottles from Australian boutique vineyards, all jostling for your attention, pleading with you to take them home and twist off their shiny screwcaps.
Cloudwine owner Chris Plazzer has heard plenty of 2007 vintage stories like Arnie Pizzini’s. He agrees that for the successful producers, dropping a whole vintage of a popular wine is a tragedy. But he argues that for the hundreds of other producers who have entered the industry over the last few years attracted by the glamour (or by the tax incentives) of owning a vineyard, and who are struggling to sell average-quality wine, 2007 couldn’t have come at a better time.
‘I visited one of our winemakers a couple of weeks ago and asked him what he thought 2007 would mean for him,’ says Plazzer. ‘And he shook his head and called it a disaster, because he lost his whole crop - but he was pouring his 2001 cabernet at cellar door. Which means he’s still got 2002, 03, 04, 05 and 06 sitting in his cellar, yet to be sold. I reckon in a couple of years time, he’ll be thankful 2007 came along.’
Plazzer also sees a number of other benefits. ‘The short vintage will have an effect on the availability of cleanskins (excess stock flogged off by wineries in unlabelled dozen bottle deals): you just won’t see as many around as we have been seeing. Also, some wine regions will benefit from others’ misfortune: the vintage wasn’t as bad in Western Australia, for example, so we’ll probably see a lot of WA wine appearing on our shelves.’
Plazzer anticipates that the shortage of supply will eventually see price rises - although, as he points out, the prices for the best wines have been rising steadily each year anyway. ‘But to be honest I think it’ll probably be good for wine drinkers to pay proper prices again,’ he says. ‘To appreciate the real value of what they’ve been getting so cheaply for so long.’
In a surprisingly small and nondescript office across town, Tony Leon oversees the operations of the $1 billion-a-year, Woolworth’s-owned liquor chain Dan Murphy’s. Leon is also staring at the inevitability of having to put Dan’s famously low prices up.
‘But let’s face it, the customer has had it easy for years now,’ says Leon. ‘They’ve been able to buy cleanskins for $2 a bottle, for god’s sake - that’s cheaper than water! I’m sure the customers understand they’ve been doing well; we know they’re not stupid. So if their favourite shiraz goes up from $22 to $23 a bottle, will they still buy it? Of course they will.’
PAUL HENRY CERTAINLY HOPES they will.
Henry is the market development manager for the Australian Wine and Brandy Corporation: it’s his job to promote Australian wine around the world. He’s also part of a team that has spent the last 18 months developing a strategy for the wine industry to move beyond the cheap-and-cheerful, sunshine-in-a-glass image it has established in export markets, and to start convincing the world to buy our top-quality regional wines as well.
The strategy was launched in May, in a restaurant in Melbourne’s Federation Square. Trams screeched past the windows as wine industry executives clicked through Power Point presentations, unveiled impressive wads of market intelligence, and announced innovative brand-segmentation initiatives.
Later, over a glass of red and tapas in one of the city’s best laneway bars, Paul Henry distilled the situation facing the industry to its essence: ‘The volume of wine we sell overseas keeps going up. But the fact is that we’ve lost $1 per litre in value for that wine over the last fourteen months.’
Now, he explains, because of the shortfall in 2007 and because of increased competition from other wine-producing countries, if Australia can’t supply volumes of cheap wine, or if the wine we can supply isn’t good enough, overseas customers - particularly the all-powerful UK supermarkets - could go elsewhere.
But again, rather than being a disaster for the industry, Henry sees this as an opportunity. ‘I think we need to be prepared to cede a percentage point or two of volume in export markets to increase value. Some of the customers we’ve created over the years, we’ve sold them a price-point rather than a category. I think we should be prepared to lose those customers. We need to increase awareness of quality.’
Henry and others suggest that one way to do this would be to keep the harvest down to about 1.6 million tonnes over the next few years - half way between last year’s and this year’s vintage. This - the argument goes - would not only produce better wine, but would also help put the Australian wine industry back into balance and see a return to profitability.
Many have been pushing for a similar shift in direction for a while - particularly those in the country’s large, hot, inland irrigated wine regions, where production has grown dramatically but returns have dwindled since the 1990s.
A year ago, Mike Stone, CEO of Murray Valley Winegrowers, based in Mildura in Victoria’s north-west, called for the national harvest to be cut by 25 per cent for a couple of years to ease the oversupply. Which just shows you should be careful what you pray for.
MILDURA IN LATE APRIL should not be this dry and sunny. I’m standing in the middle of a large vineyard on the outskirts of the town, burning under the midday glare, talking to a few growers about the vintage they’ve just been through.
Although these growers weren’t as badly hit as other regions further south by frosts or fires, yields were down because of the effects of the drought. And prospects for the 2008 vintage look even grimmer.
In a normal year, the huge vineyards in this region - which spans the Victorian and NSW sides of the Murray River around Mildura and Swan Hill - provide a quarter or more of the country’s total grape crush, most of it ending up as the cheap-and-cheerful Aussie wines in those UK supermarkets. And these vineyards are only able to do that because of the water that comes out of the river.
The words of Prime Minister John Howard are rattling in our ears as we talk: if no decent rain falls before the end of June, he said, there will be no water allocations in the region for the 2007/08 growing season. And that will result in vast, dusty paddocks full of dead vines.
‘It’s worst-case scenario stuff,’ says Dennis Mills, a grape and citrus grower from the NSW side of the river. ‘(But if we get no water) there won’t be any grapes out of the big regions for three or four years. Vines will still grow this spring because people will water till the end of June, and the vines will shoot, but then if they don’t have any water, they’ll die.’
Some have already resigned themselves to this fate. Brian Zrna owns the vineyard we’re standing in, and, like many other growers coping with dwindling water allocations, he has been slowly converting from overhead spray to more efficient - but more expensive - drip irrigation.
‘By this October, if we haven’t got a reasonable water allocation, I’m going to have to just let a third of my vines die, because I can’t afford to convert them to drip,’ says Zrna, pointing to the oldest part of the vineyard - the block which, ironically produces the lowest yields of the best quality grapes .
Zrna can’t afford to change his irrigation over because, thanks to the massive glut of the last few years, grape prices have plummeted.
‘In the late 1980s,’ he says, ‘we were getting $1500 per tonne for chardonnay, which gave us the impetus to get going, and expand. (In the 90s) the prices stayed up around $800, so we developed more farmland, and we thought it was great to be in this industry. But we knew it couldn’t last, so we were putting money aside, and planning to run at $500 a tonne.’
In the last couple of years, though - even during the 2007 vintage, when it became apparent that crops were down - Zrna and many other growers like him were lucky to get $100 a tonne for their grapes.
‘And that, quite frankly, is a disgrace,’ says Dennis Mills. ‘If the wineries want to expect people to keep growing grapes in this area, they’ve got to think about people being viable. The prices they’re paying are totally unsustainable.’
Because of the miniscule returns from grape-growing, and faced with low or zero water allocations for next year, the region is gripped by dispair. Growers are selling their water entitlements; if anyone were interested in buying, they’d be selling the farms, too.
‘It’s a major worry’ says Dennis Mills. ‘People have already taken some pretty drastic actions with their lives. It has happened. You’ll see it in the paper here, in the death notices. There’ll be one that says “sudden”, “tragic”, and nothing more.’
‘All of the reserves have gone,’ says Brian Zrna. ‘Even if the rain comes today and is here for the next six months, a lot of the desperation has got a momentum that probably won’t be cured just by it raining. That’s the problem that not many people realise.’
AMAZINGLY, THOUGH, even here, where the agricultural cycle is scraping along rock-bottom, there are signs of hope and optimism.
Most obviously, a lack of surplus grapes has already put an end to what Dennis Mills calls the carpet-baggers: unscrupulous wineries who have preyed on desperate growers over the previous few seasons, offering obscenely low prices for grapes, then not paying for them.
And if, as Mills predicts, lack of water leads to chronic temporary undersupply in the next few years, then grape prices will have to go up, some profitability will return and those growers who continue to be a part of the industry will be able to afford to invest in water-efficient infrastructure.
The dire situation has already inspired the Murray Valley Winegrowers to form a co-operative grape-selling business called Vintage Traders, which was able to negotiate better-than-average prices for its members’ fruit towards the end of the 2007 season, when it became clear to the wineries that they were facing a shortfall. Vintage Traders also had 2,000 tonnes of grapes processed into juice and bulk wine - one step away from making and selling its own wine, an initiative which could bring some dignity and pride back to the region. And a voluntary winery/grower Code of Conduct has been developed, which should go some way to fostering some sense of collaboration between the two at-times bitterly divided sides of the industry.
The drought and heat of 2007 have also prompted many in the wider industry to consider the reality of climate change and consider what kind of grapes and wine they will be able to produce in a warmer, drier near-future.
Leading the charge is Bruce Chalmers, whose vine nursery business at Euston, south-east of Mildura, specialises in importing and selling grape varieties from the hot, dry regions of southern Europe - varieties better-suited to Australian vineyards than sauvignon blanc, merlot or even chardonnay.
‘In 2006, we didn’t have much demand for vines for new vineyards,’ says Chalmers. ‘Not surprising, really, given the glut of the last few years. But since the 2007 season began, we have been getting more and more interest in our alternative varieties. People wanting to plant white grapes like vermentino and fiano from southern Italy, which have adapted amazingly well to the growing conditions up here.’
Chalmers has certainly put his money where his mouth is. He drives me around the vast, 650 hectare vineyard he has spent more than $20 million establishing over the last few years: row after row of obscure, heat-loving grapes vines such as the red Sicilian nero d’avola stretch away towards a distant horizon of dusty grey virgin bush.
And Chalmers shows off his favourite toy, hidden in a big shed in the heart of the vineyard: a state-of-the-art irrigation system, twice the size it needs to be to cope with the area under vine, so that the drippers only need to be run half the time, at night, when evaporation can be kept to a minimum.
Again, Chalmers sees reduced future irrigation allocations and the low crops experienced by many in the region this year as a positive.
‘The net advantage of 2007’s yields,’ he says, ‘is that the fruit quality and wine quality of the reds is exceptional. People have realised they can make wine with much less water than they thought they needed.’
IT’S VERY TEMPTING to put a positive spin on the lessons learned from the horror 2007 vintage. Tempting to see it as a taste of things to come. Tempting even to see what happened this year as a vision for a truly sustainable Australian wine industry: people using less water to grow more appropriate grapes, in better harmony with their environment, for good returns, producing high quality wines that consumers are willing to pay fair prices for.
But the question is, will the industry listen to what the grape-growing gods were trying to say when they threw the hardships of the 2007 vintage our way? Or, when 2010 rolls around and the national crop is once again more than 2 million tonnes, will the wine industry fall back into its old, unsustainable habits?
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