Australian wine industry on track for smallest crush in 25 years

[CANBERRA] Australia is facing its smallest wine grape harvest in more than 25 years, as shrinking demand and poor weather stifle production in one of the world’s largest wine-making nations.

The total wine grape crush for 2026 is estimated to be 1.2 million tonnes, according to a report released on Wednesday (Jul 15) by industry group Wine Australia. That was down 19 per cent from a year earlier and about a quarter below the 10-year average. The value of the vintage dropped even more sharply, falling 26 per cent to A$837 million (US$585 million).

The report adds to evidence that the global wine industry is still struggling to adapt to weaker demand, mirroring a broader slump that has wiped around US$800 billion from the value of the world’s largest listed alcohol producers over the past five years.

“There have now been four vintages in a row below the long-term average, suggesting an underlying reset in the tonnage of grapes required by winemakers to meet changing global demand,” Peter Bailey, Wine Australia’s manager for market insights, said in a statement.

Red varieties made up 80 per cent of the decrease, Wine Australia said, with white grapes only dropping by 9 per cent. White grapes made up the majority of Australia’s crush for only the second time in the past 12 years, reflecting changing consumer tastes, according to the group.

The smaller crush was not enough to lift grape prices, which fell 6 per cent on average from a year earlier despite the reduced volume, indicating demand remained weak.

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“It’s concerning that there is no sign of recovery for reds despite such a significant adjustment, and that prices for whites are also now declining,” Bailey added.

Australia’s Treasury Wine Estates, maker of the iconic Penfolds brand, has responded to the industry slowdown with cost cuts and a greater focus on luxury white wines under new CEO Sam Fischer.

Poor weather compounded the industry’s challenges. Wine Australia said respondents to their National Vintage Survey reported late frosts, heatwaves and flooding across several regions, adding to production cuts. BLOOMBERG