Introduction
Despite two extremes in the Australian wine industry - initially an oversupply of wine and now a threatening shortage - this New World wine country remains a solid competitor worthy of consideration. This is the opinion of the VinPro team of three who attended the 13th Australian Technical Conference in Adelaide at the end of July 2007 and undertook a short study tour, inter alia to the Barossa Valley, McLarenvale and the Riverland. The team also comprised Johan Rossouw from Overhex Private Cellar.
General overview of the Australian wine industry

Photo 1: Tour group consisting of Johan Rossouw (winemaker), Gert van Wyk (agricultural economist), Pierre Snyman (viticulturist) and Braham Oberholzer (soil scientist).
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The Australian wine industry constitutes a total surface of 168 791 ha (2006) of which 98 111 ha (58%) are red grapes and 70 680 ha (42%) white grapes. ±7 000 independent producers and ±2 000 wineries occur in the industry - so-called winery-owned vineyards constitute approximately 25% of the total. The South African wine industry on the other hand comprises a total surface of 102 146 ha wine grapes (55% white and 45% red grapes) with about 4 185 primary wine producers (1 863 produce less than 100 tons) and 576 wineries.
Based on producer numbers (not tons) the total Australian industry is divided 50/50 between the warm interior areas (Riverland, Murray-Darling, Riverina, etc) and the cool areas (Barossa, Margaret River, Hunter Valley, Yarra Valley, etc). With regard to the ratios of wine production, the warm interior areas produce 60% of the total crop.
Table 1 indicates that Shiraz and Chardonnay are by far the two most planted cultivars, followed by Cabernet Sauvignon and Merlot.
Table 1: Cultivar composition (click to enlarge)
Total production and stock levels
The 2006 crop produced approximately 1 901 560 tons - 55% red and 45% white. Shiraz and Chardonnay constituted 422 430 tons (22%) and 397 322 (20%) respectively of the total, while Cabernet Sauvignon amounted to 274 305 tons and Merlot 123 084 tons. The total gross recovery (wine production) amounted to 1 429 million litres - 1 410 million litres of natural wine and 19 million litres of distilling wine.
As a result of the continuing water shortage in the country, the 2007 crop decreased by 500 000 tons to 1 400 000 tons. Experts reckon that the 2008 crop should decrease by at least another 20% and that already the impact of the drought will impact negatively on the 2009 crop.

Figure 1: Total production

Figure 2: Stock levels

Figure 3: Exports
According to statistics of the Australian Wine and Brandy Corporation (AWBC) Australia would have had more than 500 million litres of surplus stocks in 2007 under normal circumstances - this is over and above the optimum stock levels, where red wine should constitute 16 months’ and white wine 10 months' stocks (optimum stock levels are based on the required stocks to supply the total market demand - calculated to the end of December).

Photo 2: Example of a barrel pruner; Photo 3 (right): Two examples of sweepers.
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The impact of said decline in the crop will probably mean that Australia will have 64 million litres less than their optimum stock level in 2008. This decrease should amount to 142 million litres in 2010.
Wine sales - past decade
From 1995/6 total domestic sales increased by 39% from 310 million litres to 431 million litres in 2005/6. In value sales for the same period increased from $AU1.4 billion to $AU1.9 billion.
Export volumes on the other hand increased more than five times - 130 million litres (1995/6) to 735 million litres (2005/6) - while value increased from $AU605 million to $AU2.8 billion. However, the average price per litre (exports) decreased from $AU4.66 per litre to $AU3.80 per litre.
2006 Price points (exports): 51% trade between $AU2.50 and $AU4.99 per litre, 26% < $AU2.50 per litre, 16% $AU5.00 to $AU7.49 per litre, 4% between $AU7.50 and $AU9.99 per litre and 3% > $AU10.00 per litre.
Australia's consolidated approach supplies the necessary financial and logistical support to venture into new markets. The Australian wine industry is dominated by four wineries - Southcorp Wines, BRL Hardy, Orlando Wyndham and Beringer Blass - with 29 companies being responsible for 89% of the national wine crop.
The top five export markets: UK 267 million litres, USA 219 million litres, Canada 51 million litres, New Zealand 32 million litres and Germany 35 million litres.

Photo 4: Pruned shoots swept onto the berm.
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Photo 5a: Example of a layershoot (inlêerstok).
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Photo 5b: Example of a layershoot (inlêerstok).
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Photo 6: Johan Rossouw with prototype plastic vineyard pole.
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Cultivation practices - Highlights of the tour
Labour in Australia is very expensive and the minimum wages for contract workers currently amount to about $AU23 (approximately R140/hour). This is one of the main reasons why certain regions such as Riverland had to mechanise to survive financially.
In McLarenvale "barrel pruners" are commonly used to prune the vines in winter. In the case of premium blocks contract workers are used to prune back mechanically pruned vines to the desired bearer lengths. Some of the premium vineyards are only pruned by hand. In conjunction with the "barrel pruner" a so-called "sweeper" is used behind the tractor. By "sweeping" (rotating rubber arms) the chopped shoots are swept onto the berm ("bankies"), thereby serving as a cover layer.
Sustainability
Australia definitely surpasses South Africa when it comes to the economic lifespan of vines. The majority of vines have scion roots that are often renewed through "inlêers" - one of several reasons why the lifespan of vines in Australia is estimated to reach 40 years and in McLarenvale even 60 years. In comparison South Africa’s grafted vines have an economic lifespan of approximately 20 years, which means that we have to replace them twice as quickly.
When a vine dies back or struggles, a vigorous shoot from an adjacent vine is bent downwards and layered into the soil, with the tip being trimmed into a clubshoot (kierie) at the cordon wire. The next summer this clubshoot then undergoes normal vine development. After about eight years the layershoot is separated from the mother vine. This method of renewal can be used seeing that the majority of plantings in Australia are ungrafted vines. The greatest danger and potential time bomb for their wine industry remains the phylloxera aphid. Because of the increase in phylloxera, more and more grafted vines are being planted.
Iron poles are used in many vineyard blocks - several that had been damaged by wind were observed by the tour group. Plastic poles are also being phased in to reduce trellis system costs - these will be available in Australia as soon as problems with softening caused by the sun have been ironed out.
A visit to a local nursery revealed that Ramsey is the most popular rootstock, even for red grapes. Ramsey is a strong rootstock that is managed with little water, or poor quality water so that the growth is less vigorous than here - though so far there has been no negative correlation with wine quality. Another interesting phenomenon is that Shiraz and Chardonnay, the main Australian cultivars, are planted on practically all the farms that were visited. In a top quality Chardonnay vineyard in Barossa Valley, a long bearer is found on each vine in an attempt to increase bearing. Shiraz was often encountered on high potential soils - although management is adjusted to prevent unnecessarily vigorous conditions.
In the Riverland one finds the so-called 2 wire vertical cordon (Photos 5a & b). In the first year a vine is turned into a clubshoot at a height of about 200 cm. Two shoots are also developed on the lower wire (60 cm lower). These vines are pruned mechanically, mainly using the barrel pruner. Bearer lengths range considerably throughout the block, but generally have 2 to 5 buds.
The visit to BRL Hardy Cellar at Berry was an eye-opener. This cellar crushed about 220 000 tons in 2006. They employ 15 winemakers which means 15 000 tons per winemaker. The cellar receives about 5 000 tons a day, 7 days a week. It goes without saying that the cellar has many tanks, most of which are large, but it was refreshing to see several small tanks of 5 000 litres for special wines.
What is the state of their resources?
The Australian viticultural industry is fully aware of the value of water and admits that reduced water allocations and lower yields threaten national and international export markets. Droughts in recent years have necessitated the effective usage of water in the vineyard. Experts agree that it is not the water shortage, but salinisation and soil becoming brackish that are the biggest threats to the industry. Brian Caddy, one of the biggest wine farmers in Riverland, said the following at one of the work sessions at the congress: "Salinity, not drought, will have the greatest impact on viticulture in the industry in 2007/8". The tour group visited sites along the Murray River where the soils have extremely high sodium salt levels resulting in their soils becoming seriously brackish, as can be seen in Photo 8.

Photo 7: The Murray River at the time of our visit to the Riverland.
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Photo 8: Soil that has become brackish - completely slaked, resulting in poor water infiltration and drainage.
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Photos 9a, b & c: Various tools for monitoring root zone salinisation.
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13th Australian Wine Industry Technical Conference in Adelaide
During the conference a full day was dedicated to a workshop discussion about research on the management of salinisation and the soil’s becoming brackish as a result of precision irrigation. Highly effective irrigation, with moderately salty water, regularly resulted in insufficient leaching of residual salts, which in turn threatened the sustainability of vines. Their research indicates that given highly effective irrigation of 90% water usage effectiveness, irrigation water of 100 mS/m will result in 2 tons per hectare of salt accumulating in the root zone.

Photo 10: Rye grass used for cover crop cultivation.
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"You cannot manage what you cannot measure", is the motto of the Australian viticultural industry. For this reason they promote various tools and techniques of monitoring root zone salinisation in their viticultural industry. Inexpensive, permanent soil water extractors are installed, such as the SoluSAMPLER (Photo 9a & b) and the wetting front detector called "fullstop" (Photo 9c).
The Australian viticultural industry has been compelled to make use of rootstocks instead of scion roots, as has been the case in South Africa for many years. At the congress their research results indicated that Shiraz, both on Paulsen and Ramsey rootstocks, may have up to double the tolerance for salinisation, namely 660 mS/m (rootstocks) compared to 360 mS/m (scion roots) - the lower the conduction, the less salinisation. They also indicate that threshold value criteria for sensitive to moderately tolerant cultivars will result in a 100% yield at 360 mS/m while only 75% yield will be obtained at 880 mS/m.
Over the past 20 years there has been little research on the management of the nutritional status requirements of their vines. The move from scion roots to rootstocks has necessitated thorough research in this regard. Hardly any funding is available for this kind of research, however, which is the excuse used by most researchers. According to Michael Treeby of CSIRO (personal communication, 2007) research that is currently being implemented appears to be largely that of South African experts, in particular Dr Kobus Conradie. Even the Californians who expected the Australians to be more clued up, indicated that they were also using Dr Conradie’s research to good effect. Until recently their scientific articles about vine nutrition indicated that leaf analyses were taken at flowering - now they maintain that the best results are obtained at flowering.
Unlike South Africa’s 74 soil types, they only have 13 soil orders. South Australia has considerably more calcareous soils than the predominantly acidic soils of Western Australia, mostly with deficits of all elements. Primary soil preparation does not receive a great deal of attention, although a few actions deserve mention. Deep ripping is applied in the row with gypsum, lime and phosphates being washed into the soil by irrigation. Following ripping of the hard calcareous soils there are coarse fragments on the surface, which are then broken up with an implement called a "Kirpy", which works like a rotovator with a number of hammers that pulverise the calcareous stones into fine red soil that appears very even on the surface. The most important cultivation is considered the topsoil treatment (Photo 10) - in this respect rye grass is not a problem, it is cut short between rows and killed by spraying on the berms.
Financial position of Australian wine grape producers
With regard to profitability, approximately 90% (5 000) of the country’s wine grape producers - who cultivate less than 50 ha - are not profitable at current prices. In warmer areas such as the Riverland and Mildura $AU380/ton is offered for red wine grapes and $AU360/ton for white. At a production cost of $AU300 - $AU350/ton in the same areas it is clear that producers are under enormous pressure. The profitability in the cooler areas (Barossa, Adelaide Hills, Margaret River, etc) seems to be under even greater pressure due to costs of $AU1000/ton - $AU1100/ton compared to average prices that fetch even less. Results are for the period until August 2007.