The wine glut is over – is it?

Recently quite a few reports and news sources have talked about the end of the wine oversupply which we experienced in global wine markets during the last couple of years. After years of wine surplus, it seems that poor vintages in the USA, Australia and Europe will lead to a drop in global production by about 20%.

“Technically” Australia is still oversupplied. But the demand for Australian bulk wine is back to normal, say some analysts. New acquisitions of vineyards producing wines at the luxury end is being reported. Sales prices for such estates were rather depressed during the last couple of years. For cash rich buyers sales prices and timing are right to make such new investments.

The mid-term prospects for high-quality grapes and high-quality wines are good. Such news is music to my ears. As a small vineyard with just under 4 ha under vines we have survived so far. Our plan is to bring our Pinot Noir vineyard back into production this season. The rest remains mothballed for another year.

Two Hills Vineyard Chardonnay plot

After that, we intend to bring first the Chardonnay and if demand should recover also the Sauvignon Blanc back into production. Currently we work on land fertility. Some of our Merlot is going to be pulled out. If we replant, it would be with Pinot Noir, I guess. But this is not going to happen until we are sure to find buyers for our fruit.

Let us hope that the wine glut is over, and that a reorientation to high-value grapes and wines is becoming a robust trend.

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