Growth and Cycles in Australia s Wine Industry:

Growth and Cycles in Australia s Wine Industry: A Statistical Compendium, 1843 to 213 Kym Anderson with the assistance of Nanda R. Aryal Wine Economics Research Centre School of Economics University of Adelaide Adelaide, South Australia

2 Published in Adelaide by the University of Adelaide Press Kym Anderson 215 All rights reserved. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process without written permission from the authors and publisher. 2

Table of contents List of charts List of tables Preface and acknowledgements Technical notes Statistical sources Executive summary of key findings Ch. 1 A guide to the industry s growth and cycles 1.1 Introduction 1.2 Candidate indicators of wine industry developments 1.3 The five cycles to date 1.4 What did innovation and generic marketing and R&D contribute? 1.5 Was the optimism at the start of the 5 th cycle warranted? 1.6 Australia s wine industry growth in international historical perspective 1.7 Why has adjustment to declining profits been so sluggish? 1.8 In retrospect, was the industry helped or hurt by protectionism? 1.9 Annex: Conceptualizing the market for a nation s wine Ch. 2 Regional developments from the late 2 th century 2.1 Introduction 2.2 Sources of regional data 2.3 Regional differences and their contributions 2.4 Are regional differences being recognized in the market? 2.5 Which regions have adjusted most since the latest downturn? Ch. 3 Varietal developments since the 195s 3.1 Introduction 3.2 Evolution of winegrape varietal mix 3.3 Emerging varieties in Australia 3.4 Indicators of varietal mix and quality distinctiveness 3.5 The global data 3.6 Australia s varietal distinctiveness globally 3.7 Varietal Quality Differences within Australia 3.8 Varietal prices and January temperatures

Ch. 4 Where to from here? 4.1 Market prospects 4.2 What about the varietal mix across regions? 4.3 Policy and institutional implications 4.4 Some lessons from history 4.5 Conclusion References Charts Table sections: I. Grape and wine production, consumption and trade since 1843 II. III. IV. Regional grape and wine developments from the late 2 th century Winegrape varietal developments since the mid-195s Appendix of macroeconomic and international data since the early 18s V. Regional varietal area, production and price data, 1999 to 213 (online in Excel, as are the above series of tables, at www.adelaide.edu.au.wineecon/databases)

List of charts Section I: Australian grape and wine production, consumption and trade 1. Bearing area of vineyards, wine production, and wine exports, 1986 to 213 2. Volume, average price and value of export sales of Australian wine, 199 to 213 3. Value of wine exports, Australia and other New World countries, 1995 to 214 4. Index of revealed comparative advantage in wine, Australia and other key exporters, 1986 to 212 5. Bearing area of vineyards, Australia and South Australia, 1843 to 213 6. Wine production, Australia and South Australia, 1843 to 213 7. Volume of Australian wine exports to United Kingdom and world, 1854 to 213 8. Exports as % of wine production and imports as % of apparent wine consumption, 1843 to 213 9. Vine area, wine production, and wine exports, 1843 to 213 1. Indexes of vine area, wine production, and wine exports, per capita, 1843 to 213 11. Vine area as a percent of total crop area, and wine production per $ of real GDP, 1843 to 213 12. States shares of Australian vine area, 1843 to 213 13. Vine s share of total cropped area, by State, 1843 to 213 14. Wine production per capita, by State, 1843 to 1913 15. Share of wine production exported, and all merchandise exports as a share of GDP, 1856 to 213 16. Volume and value shares of exports in sales of Australian wine, 1984 to 213 17. Average price of winegrapes and of exports, and vine area, 1986 to 214 18. Volumes of wine exports by price segment, 2 to 214 19. Unit value of wine exports, Australia and other New World countries, 199 to 213 2. Winegrape price, and volume and value of winegrape production, 1999 to 214

21. Volume and value shares of imports in wine consumption in Australia, 1984 to 213 22. Number of wineries in Australia, 1985 to 213 23. Real exchange rate, 197 to 213 and international terms of trade, 1871 to 213 24. Indexes of real international prices of food, energy raw materials and minerals, 196 to 214 25. Mining share of merchandise value added and vine area per capita, 1972 to 213 26. Share of bulk wine in volume of exports, Australia and other key exporters, 2 to 213 27. Shares of wine exports, by State of processing, 1995 to 211 28. Total value of wine imports, by source, 1999 to 214 29. Unit value of wine imports, by source, 21 to 211 3. Closing stock and stocks-to-sales ratio, 1971 to 213 31. Shares of wine production destined for table wine, fortified wine and distillation, 1923 to 213 32. Gender ratio, 182 to 195 33. Per capita production of beer, table wine, fortified wine, and brandy, 1923 to 213 34. Per capita consumption of alcohol as wine, beer and spirits, 1843 to 213 35. Shares of wine, beer and spirits in alcohol consumption, 1843 to 213 36. Late colonial per capita consumption of wine, beer and spirits, 1896 37. Wine and total alcohol consumption per $ of real GDP,186 to 213 38. Wine consumption and real GDP, per capita, 186 to 213 39. Structural changes to wine and brandy production, 197 to 213 4. Evolution in consumption and plantings by colour/style, 1956 to 212 41. Shares of domestic wine sales, by container type, 1978 to 213 42. R&D investment, total and as a percent of wine sales, 1984 to 213 43. Number of producers and total output, by volume of grapes crushed, 212 44. National shares of global wine production volume, 197 to 27 45. National shares of global wine export volumes, 1927 to 213 46. Wine production per capita, main Old and New World countries, 184 to 213

47. Vine area as a share of total crop area (%), main Old and New World countries, 1961 to 211 48. Wine production volume per $ of real GDP, main Old and New World countries, 198 to 28 49. Wine production value as a share of GDP, main Old and New World Countries, 29 5. Wine exports per capita, main Old and New World countries, 184 to 213 51. Wine comparative advantage index, 1961 to 213 52. Share of volume of global wine exports, key Mediterranean countries, 1861 to 211 53. Nominal rates of assistance to grape growing, wine making, all agriculture, and all manufacturing, 194 to 213 54. Ad valorem consumer tax equivalent of excise in commercial premium wines, various countries, 212 and 214 55. Total and unit value of Australia s wine export to Asia, 211-14 Section II. Regional grape and wine developments from the late 2 th century 56. Map of Australia s 65 wine regions 57. Winegrape bearing area and winegrape production, by climate zone, 21 to 212 58. Regional shares of national winegrape bearing area, 23 and 212 59. Regional diversity in terms of vine intensity of cropping, 26 6. Regional diversity in terms of winegrape yield per hectare, 21 and 212 61. Average price of winegrapes, by region, 23, 28 and 213 62. Distribution of winegrape prices across price points nationally, 28 and 214 63. Regional shares of national winegrape production value, 23 and 212 64. Regional diversity in terms of grape and wine industry employment, 26 and 211 65. Regional diversity in terms of grape and wine value added, 26 and 211 66. Regional Quality Index dispersion, 21 and 212 67. Average price of winegrapes, by region, Australia, 213 68. Regional Quality Index diversity across climate zones, 1999 to 212

69. Regional diversity in terms of winegrape varieties (Varietal Similarity Index), 21 and 212 7. Varietal Similarity Index a dispersion, 21 and 21 71. Percentage change in winegrape bearing area, by region, 21 to 28 72. Change in winegrape bearing area, by region, 28 to 212 Section III. Winegrape varietal developments since the 195s 73. Shares of Australian winegrape area, by varietal colour and quality, 1956 to 212 74. Shares of winegrape bearing area, by variety, 1956 to 212 75. Shares of winegrape bearing area, by varietal country of origin, 1956 to 212 76. Change in bearing area for most-expanded varieties, Australia, 21 to 212 77. Cumulative shares of Australian winegrape area, by main varieties, 1956, 1984 and 212 78. Shares of national wine area, production and exports of key varieties, and yield, 212 79. Angular separation between two regions, each growing two grape varieties 8. World s top 35 varieties in 21, compared with 199 and 2 81. Bearing area of Syrah, key producing countries, 2 and 21 82. Australian regions with largest Varietal Intensity Index relative to global average, key red varieties, 21 and 21 83. Australian regions with largest Varietal Intensity Index relative to global average, key white varieties, 2 and 21 84. National average prices of main winegrape varieties, 213 85. Varietal Quality Index dispersion, Australia, 1999 and 212 86. Winegrape price and mean January temperature, select varieties, 26

Section I: Australian Grape and Wine Production, Consumption and Trade

199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 212 1. Bearing area of vineyards, wine production, and wine exports, 1986 to 213 18 16 14 12 Vine area (ha x 1) Wine production (kl) Wine exports (kl) 1 8 6 4 2 2. Volume, average AUD price and value of export sales of Australian wine, 199 to 213 35 3 Average price of exports ($ per litre) RH Scale Wine exports volume (kl) LH scale Wine exports value (' $) LH scale 6 5 25 2 15 1 5 4 3 2 1

1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 3. Value of wine exports, Australia and other New World countries, 1995 to 214 (US$ ) 3 25 2 15 Australia New Zealand United States Chile Argentina South Africa 1 5 4. Index of revealed comparative advantage in wine, Australia and other key exporters, 1986 to 212 (1. = world) 18. 16. 14. 12. 1. Australia France Argentina New Zealand Chile South Africa 8. 6. 4. 2.. 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 212 a Wine s share of a country s exports divided by wine s share of global exports.

1843 1848 1853 1858 1863 1868 1873 1878 1883 1888 1893 1898 193 198 1913 1918 1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 23 28 213 1843 1848 1853 1858 1863 1868 1873 1878 1883 1888 1893 1898 193 198 1913 1918 1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 23 28 213 Up 18,4 ha (13/yr, 4-fold rise) Up 21,6 ha (22/yr, 2-fold rise) Up 13,5 ha (17/yr, 25% rise) Up 14,8 ha (48/yr, 3-fold rise) [or up 8/yr during 1995-28] 5. Bearing area of vineyards, Australia and South Australia, 1843 to 213 (ha) (a) Regular scale 18 16 14 12 1 8 6 Up 6,3 ha (4/yr, 1-fold rise) 4 2 (b) Log-linear scale 6 South Australia Australia 5 4 3 2 1

1843 1848 1853 1858 1863 1868 1873 1878 1883 1888 1893 1898 193 198 1913 1918 1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 23 28 213 Up 78 kl (49/yr 16-fold rise) Up 13,6 kl (1/yr, 3-fold rise) Up 47,4 kl (47/yr 5-fold rise) Up 862, kl (39,2/yr, 3-fold rise) 1843 1848 1853 1858 1863 1868 1873 1878 1883 1888 1893 1898 193 198 1913 1918 1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 23 28 213 6. Wine production, Australia and South Australia, 1843 to 213 (kl) (a) Regular scale 16 14 12 South Australia Australia 1 8 6 4 2 (b) Log-linear scale 7 6 South Australia Australia 5 4 3 2 1 Up 172, kl (21,4/yr 2-fold rise)

1854 1859 1864 1869 1874 1879 1884 1889 1894 1899 194 199 1914 1919 1924 1929 1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 24 29 214 Up 3, kl (2 kl//yr, 28- Up 16, kl (116 kl//yr, 8-fold Up 674, kl (3,6 kl/yr, 9-fold 1854 1859 1864 1869 1874 1879 1884 1889 1894 1899 194 199 1914 1919 1924 1929 1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 24 29 214 7. Volume of Australian wine exports to United Kingdom and world, 1854 to 213 (kl) (a) Regular scale 8 7 6 Total wine exports Wine exports to UK 5 4 3 2 1 (b) Log-linear scale 6 5 4 3 2 1

1843 1848 1853 1858 1863 1868 1873 1878 1883 1888 1893 1898 193 198 1913 1918 1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 23 28 213 1843 1852 1861 187 1879 1888 1897 196 1915 1924 1933 1942 1951 196 1969 1978 1987 1996 25 8. Exports as % of wine production and imports as % of apparent wine consumption, 1843 to 213 (%, 3-year moving average) 1 9 8 7 6 5 4 3 2 1 Exports as % of Aust. prodn Imports as % of apparent consm 9. Vine area, wine production, and wine exports, 1843 to 213 (log-linear scale) 7. Vine area Wine production 6. Wine exports 5. 4. 3. 2. 1..

1843 1848 1853 1858 1863 1868 1873 1878 1883 1888 1893 1898 193 198 1913 1918 1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 23 28 213 1843 1848 1853 1858 1863 1868 1873 1878 1883 1888 1893 1898 193 198 1913 1918 1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 23 28 213 1. Indexes of vine area, wine production, and wine exports, per capita, 1843 to 213 (27 = 1) 16 14 12 Vine area per capita Wine prodn per capita Wine exports per capita 1 8 6 4 2 11. Vine area as a percent of total crop area, and wine production per $ of real GDP, 1843 to 213 (27 = 1) 18 16 14 Vine area as % of total crop area production per $ of real GDP 12 1 8 6 4 2

1843 1852 1861 187 1879 1888 1897 196 1915 1924 1933 1942 1951 196 1969 1978 1987 1996 25 12. States shares of Australian vine area, 1843 to 213 (%) 8 7 6 5 4 3 2 SA NSW Vic WA Tas Qld 1 13. Vine s share of total cropped area, by State, 1843 to 213 (%, 5-year averages) 2.2 2. 1.8 1.6 SA NSW Vic WA Tas Qld Australia 1.4 1.2 1..8.6.4.2. 18451855186518751885189519519151925193519451955196519751985199525213

1843 1846 1849 1852 1855 1858 1861 1864 1867 187 1873 1876 1879 1882 1885 1888 1891 1894 1897 19 193 196 199 1912 14. Wine production per capita, by State, 1843 to 1913 (litres/year) 45 (a) New South Wales, South Australia and Victoria, annual 4 35 3 25 South Australia New South Wales Victoria 2 15 1 5 35 3 (b) NSW, SA, Vic and WA, 5-year averages 25 2 15 1 SA NSW Victoria WA 5 1891-95 1896-19 191-5 196-1 1911-15

1984 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 1858 1865 1872 1879 1886 1893 19 197 1914 1921 1928 1935 1942 1949 1956 1963 197 1977 1984 1991 1998 25 7 15. Share of wine production exported, and all merchandise exports as a share of GDP, 1856 to 213 (5-year moving average) 6 5 4 Wine X/Q All X/GDP 3 2 1 7 16. Volume and value shares of exports in sales of Australian wine, 1984 to 213 (%) 6 Value Volume 5 4 3 2 1

17. Average AUD price of winegrapes and of exports, and vine area, 1986 to 214 18 16 14 12 1 8 6 4 2 Vine area (' ha) LH scale Winegrape price ($/t) LH scale Wine export price ($ per litre) RH scale 6 5 4 3 2 1 18. Volumes of wine exports by AUD price segment, 2 to 214 (litres) 45 4 35 3 $2.49 and under $2.5 to $4.99 $5. to $7.49 $7.5 to $9.99 $1. and over 25 2 15 1 5

19. Unit value of wine exports, Australia and other New World countries, 199 to 213 (US$/litre) 8 7 6 5 France Australia New Zealand USA Chile 4 3 2 1 199 1992 1994 1996 1998 2 22 24 26 28 21 212 2. Winegrape price, and volume and value of winegrape production, 1999 to 214 2 18 16 14 12 1 8 6 4 2 Price ($/t) Volume (kt) Value ($m)

1984 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 21. Volume and value shares of imports in wine consumption in Australia, 1984 to 213 (%) 25 2 Value Volume 15 1 5 22. Number of wineries in Australia, 1985 to 213 3 25 2 15 1 5 1985 1987 1989 1991 1993 1995 1997 1999 21 23 25 27 29 211 213

1871 1878 1885 1892 1899 196 1913 192 1927 1934 1941 1948 1955 1962 1969 1976 1983 199 1997 24 211 18 16 14 12 1 23. Real exchange rate, 197 to 213 and international terms of trade, 1871 to 213 (a) AUD real exchange rate, trade-weighted average 8 6 4 2 18 16 14 12 1 197 1975 198 1985 199 1995 2 25 21 (b) Australia s international terms of trade 8 6 4 2

1972 1974 1976 1978 198 1982 1984 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 212 196 1963 1966 1969 1972 1975 1978 1981 1984 1987 199 1993 1996 1999 22 25 28 211 214 24. Indexes of real international prices of food, energy raw materials and minerals, 196 to 214 (US$, 25 = 1) 2 18 16 14 Energy Food Mins&metals 12 1 8 6 4 2 25. Mining share of merchandise value added and vine area per capita, 1972 to 213 (% of GDP excluding services, and hectares) 12 1 8 Mining share of merch VA vine area per cap 6 4 2

1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 26. Share of bulk wine in volume of exports, Australia and other key exporters, 2 to 213 (%) 8 7 6 Australia New Zealand United States Chile South Africa Argentina 5 4 3 2 1 2 21 22 23 24 25 26 27 28 29 21 211 212 213 27. Shares of wine exports, by State of processing, 1995 to 211 (%) 1% 9% 8% 7% 6% 5% 4% 3% WA Vic NSW SA 2% 1% %

28. Total value of wine imports, by source, 1999 to 214 (AUD) $4,, $35,, $3,, $25,, NEW ZEALAND FRANCE ITALY SPAIN $2,, $15,, $1,, $5,, $ 29. Unit value of wine imports, by source, 21 to 211 (US$/litre) 25 2 France New Zealand Italy Spain 15 1 5 21 22 23 24 25 26 27 28 29 21 211

1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 23 28 213 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 21 23 25 27 29 211 213 3. Closing stock and stocks-to-sales ratio, 1971 to 213 22 Wine stock (ML) LH scale 2 stock-to-sales ratio RH scale 18 16 14 12 1 8 6 4 2 3 2.8 2.6 2.4 2.2 2 1.8 1.6 1.4 1.2 1.8.6.4.2 31. Shares of wine production destined for table wine, fortified wine and distillation, 1923 to 213 (%) 1 9 8 7 6 5 4 3 2 1 Table wine Fortified wine Distillation wine

1923 1927 1931 1935 1939 1943 1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 23 27 211 182 1825 183 1835 184 1845 185 1855 186 1865 187 1875 188 1885 189 1895 19 195 191 1915 192 1925 193 1935 194 1945 195 1955 196 1965 197 1975 198 1985 199 1995 2 25 21 32. Gender ratio, 182 to 195 (males per female) 4. 3.5 3. 2.5 2. 1.5 1..5. 9. 33. Per capita production of beer, table wine, fortified wine, and brandy, 1923 to 212 (litres of alcohol, 3-year moving average) 8. 7. 6. 5. Beer Brandy Table wine Fortified wine 4. 3. 2. 1..

1844 1852 186 1868 1876 1884 1892 19 198 1916 1924 1932 194 1948 1956 1964 1972 198 1988 1996 24 212 1844 1851 1858 1865 1872 1879 1886 1893 19 197 1914 1921 1928 1935 1942 1949 1956 1963 197 1977 1984 1991 1998 25 212 2 34. Per capita consumption of alcohol as wine, beer and spirits, 1843 to 213 (litres of alcohol, 3-year moving average) 18 16 14 12 1 Wine Beer Spirits Total 8 6 4 2 35. Shares of wine, beer and spirits in alcohol consumption, 1843 to 213 (% alcohol, 3-year moving average) 1 9 8 7 Spirits 6 5 4 3 Beer 2 1 Wine

36. Late colonial per capita consumption of wine, beer and spirits, 1896 (a) Relative to Australian average (%) 35 3 25 2 Wine Beer Spirits TOTAL 15 1 5 WA Qld Vic SA NSW Tas Australia NZ (b) Litres of alcohol 1 9 8 7 6 Wine Beer Spirits 5 4 3 2 1 WA Qld Vic SA NSW Tas

186 1867 1874 1881 1888 1895 192 199 1916 1923 193 1937 1944 1951 1958 1965 1972 1979 1986 1993 2 27 186 1867 1874 1881 1888 1895 192 199 1916 1923 193 1937 1944 1951 1958 1965 1972 1979 1986 1993 2 27 37. Wine and total alcohol consumption per $ of real GDP,186 to 213 (litres of alcohol per $million of GDP at 21-11 prices) 14 12 1 8 Wine All alcohol Log. (All alcohol) 6 4 2 38. Wine consumption and real GDP, per capita, 186 to 213 (log-linear scale, polynomial fitted lines) 4.5 4. 3.5 3. GDP per capita Wine consm per capita Poly. (GDP per capita) Poly. (Wine consm per capita) 2.5 2. 1.5 1..5.

197 1912 1917 1922 1927 1932 1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 22 27 212 1923 1927 1931 1935 1939 1943 1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 23 27 211 39. Structural changes to wine and brandy production, 197 to 213 (a) Shares of grape production for winemaking, wine production for distillation, and distillation for brandy (%) 1 9 8 7 6 5 4 3 2 1 % grapes used for wine % wine prod'n distilled % distilled to brandy 35 3 (b) Brandy exports as % of production, imports as % of consumption, and selfsufficiency in brandy Imports as % of sales Exports as % of prodn 25 Apparent self-suff. (%) 2 15 1 5

1968 197 1972 1974 1976 1978 198 1982 1984 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 212 4. Evolution in consumption and plantings by colour/style, 1956 to 212 (%) (a) Shares of volume of domestic sales of Australian wine by colour/style 1% 9% 8% Fortified 7% 6% 5% 4% 3% 2% 1% Sparkling White Red % (b) Shares of winegrape area, premium and non-premium whites and reds 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% Non-premium white Premium white Non-premium red Premium red %

1984 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 1978 198 1982 1984 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 212 41. Shares of domestic wine sales, by container type, 1978 to 213 (%) 1% 9% 8% Sparkling+other 7% 6% 5% Soft pack 4% 3% 2% 1% Bottled still % 42. R&D investment, total and as a percent of wine sales, 1984 to 213 35 3 25 2 15 1 5 AWRI +CRCV+ other GWRDC ($m) LH scale % of sales RH scale.9.8.7.6.5.4.3.2.1.

43. Number of producers and total output, by volume of grapes crushed, 212 (a) Number of producers 35 3 25 grapegrowers winemakers 2 15 1 5 <1t 1-25t 25-5t 5-1t >1t (b) Winegrape production (kt of grapes crushed) 8 7 6 grapegrowers winemakers 5 4 3 2 1 <1t 1-25t 25-5t 5-1t >1t

44. National shares of global wine production volume, 197 to 27 (%) 4 35 3 25 2 15 1 5 197 1957 27 45. National shares of global wine export volumes, 1927 to 213 (%) 3 25 2 15 1927 1957 27 213 1 5 a Algeria is not shown: its shares were 57% in 197, 4% in 1957 and % in 27 and 213

1842 1852 1862 1872 1882 1892 192 1912 1922 1932 1942 1952 1962 1972 1982 1992 22 211 46. Wine production per capita, main Old and New World countries, 184 to 213 (litres/year, 5-year averages around year shown except 212 = 21-13) (a) France, Italy, Portugal and Spain a 16 14 12 1 8 6 4 2 France Italy Portugal Spain a Algeria is not shown: its production was more than 15 litres/capita during the 195s but was only 3 in the 197s, eight in the 198s, and has been less than two since then. (b) Argentina, Australia, Chile, New Zealand, South Africa, and United States 16 14 12 1 8 Australia New Zealand United States Argentina Chile South Africa 6 4 2

47. Vine area as a share of total crop area (%), main Old and New World countries, 1961 to 211 (a) main Old World countries a 25 2 15 1961-64 198-84 2-4 21-11 1 5 a Shares for Moldova averaged 7% over the 2-9 period, the same as Spain. 25 (b) main New World countries 2 15 1 1961-64 198-84 2-4 21-11 5 Chile New Zealand South Africa Argentina Australia United States

48. Wine production volume per $ of real GDP, main Old and New World countries, 198 to 28 (kl per million 199 International Geary-Khamis dollars) 1 9 8 7 6 5 4 3 2 1 198 1928 1958 1988 28 49. Wine production value as a share of GDP, main Old and New World countries, 29 (%).45.4.35.3.25.2.15.1.5.

5. Wine exports per capita, main Old and New World countries, 184 to 213 (litres/year, 5-year averages around year shown except 212 = 21-13) (a) France, Italy, Portugal and Spain a 5 45 4 35 3 25 2 15 1 5 France Italy Portugal Spain a Algeria is not shown: it exported more than 1 litres per capita per year during 19-6 but only six litres in the 198s and less than.5 litre since then. (b) Argentina, Australia, Chile, New Zealand, South Africa, and United States 5 45 4 35 3 25 2 Australia New Zealand United States Argentina Chile South Africa 15 1 5

51. Wine comparative advantage index, a 1961 to 213 (a) main Old World countries, 1961 to 211 b 2. 18. 16. 14. 12. 1. 8. 1961-64 198-84 2-4 21-11 6. 4. 2.. France Portugal Italy Spain Bulgaria Greece Romania b Algeria, Tunisia, Georgia and Moldova are not shown: the indexes for Algeria and Tunisia in 1961-64 were 118 and 49, but were <.5 from 198; the indexes for Georgia and Moldova were 43 and 1 in 2-4 and 14 and 42 in 21-11. (b)main New World countries, 1961 to 213 2. 18. 16. 14. 12. 1. 8. 6. 4. 2.. New Zealand 1961-64 198-84 2-4 21-13 Chile Argentina South Africa Australia United States a Index is the share of wine in national merchandise exports divided by wine s share of global exports.

1863 1869 1875 1881 1887 1893 1899 195 1911 1923 1929 1935 1953 1959 1965 1971 1977 1983 1989 1995 21 27 52. Share of volume of global wine exports, key Mediterranean countries, 1861 to 211 (%, 5-year moving average) 9 8 7 6 France Italy Spain Algeria 5 4 3 2 1 53. Nominal rates of assistance to grape growing, wine making, all agriculture, and all manufacturing, 194 to 213 6 5 4 3 All agric. Drying grapes Wine grapes Wine making All manufac. 2 1 194-39 195-67 1967-86 1986-95 1996-213

Argentina Austria Germany Greece Hungary Italy Luxembourg Portugal Spain Switzerland France South Africa Poland USA Belgium Canada Netherlands Estonia Japan Chile Denmark Mexico New Zealand Australia Korea Sweden Ireland UK Finland Norway 54. Ad valorem consumer tax equivalent of excise in commercial premium wines, various countries, 212 and 214 1 9 8 7 6 5 4 3 2 1 212 214 55. Total and unit value of Australia s wine export to Asia, 211-14 (A$m/year and A$/litre, July 211 to June 214) 25 2 15 1 5 Value(LH axis, $m) Price (RH axis, $/litre) 12 1 8 6 4 2

Section II. Regional grape and wine developments from the late 2 th century

56. Map of Australia s 65 wine regions Source: Australian Grape and Wine Authority

1 57. Winegrape bearing area and winegrape production, by climate zone, 21 to 212 (a)bearing area (ha) 8 7 6 5 4 3 2 Hot Warm Cool 1 21 22 23 24 25 26 27 28 29 21 211 212 (b)winegrape production (tonnes) 14 12 1 8 6 4 Hot Warm Cool 2 21 22 23 24 25 26 27 28 29 21 211 212 1

McLaren Vale Yarra Valley Margaret River Adelaide Hills Orange Coonawarra Langhorne/Curr Creek Alpine V/Beech Mornington Peninsula Rutherglen Barossa/Eden Valley Hunter Murray Darling NSW Goulburn Valley Other Limestone Coast Riverland Great Southern Riverina Swan District Mudgee/Cowra Swan Hill VIC Tasmania Clare Valley Canberra District Murray Darling VIC West/Central Highlands Riverina Riverland Barossa Valley Murray Darling - VIC Murray Darling - NSW McLaren Vale Coonawarra Langhorne Creek Margaret River Padthaway Clare Valley Adelaide Hills Hunter Swan Hill (VIC) Great Southern Yarra Valley Wrattonbully Eden Valley Mudgee Orange King Valley Heathcote Goulburn Valley Cowra Limestone Coast - other Tasmania Geographe Rutherglen Mornington Peninsula Pyrenees Robe Swan District 58. Regional shares of national winegrape bearing area, 23 and 212 (%) 16. 14. 12. 1. 8. 23 212 6. 4. 2.. 12 59. Regional diversity in terms of vine intensity of cropping, 26 1 8 6 4 2

Mornington Peninsula Tasmania Yarra Valley Canberra District Beechworth McLaren Vale Port Phillip - other Gippsland Coonawarra Blackwood Valley Margaret River Barossa Valley Great Southern Eden Valley Adelaide Hills Bendigo Southern Fleurieu Padthaway Heathcote Wrattonbully Clare Valley Adelaide Plains Geographe Granite Belt Hunter Valley Zone Pemberton Langhorne Creek Orange Currency Creek Alpine V/Beechworth Swan District King Valley Cowra Mudgee Murray Darl/Swan Hill Riverland Riverina Canberra District Granite Belt Mudgee Bendigo Rutherglen Port Phillip - other Cowra Mornington Peninsula Hunter Henty Tasmania Tumbarumba Blackwood Valley Yarra Valley Coonawarra Orange Eden Valley Clare Valley Great Southern Beechworth Pemberton Adelaide Hills Barossa Valley McLaren Vale Geographe Swan District Alpine Valleys Goulburn Valley Margaret River Currency Creek King Valley Padthaway Adelaide Plains Wrattonbully Perricoota Langhorne Creek Australia Total Riverina Swan Hill (NSW) Swan Hill (VIC) Murray Darling (VIC) Riverland Murray Darling (NSW) 6. Regional diversity in terms of winegrape yield per hectare, 21 and 212 (t/ha) 25 2 21 212 15 1 5 61. Average price of winegrapes, by region, 23, 28 and 213 (AUD/tonne) 25 2 15 23 28 213 1 5

% Share of Total Tonnes 62. Distribution of winegrape prices across price points nationally, 28 and 214 (% of total tonnes crushed, from AGWA (214) and the earlier 28 report) (a) 28, all varieties 2 18 16 14 12 1 8 6 4 2-249 25-3- 35-4- 45-5- 55-6- 65-7- 299 349 399 449 499 549 599 649 699 749 75-8- 85-9- 95-1- 15-11- 115-12- 125-13- 135-14- 145-15- 155-16- 165-17- 175-18- 185-19- 195-2 799 849 899 949 999 149 199 1149 1199 1249 1299 1349 1399 1449 1499 1549 1599 1649 1699 1749 1799 1849 1899 1949 1999 + %Share of Tot Tonnes 1 2 1 8 11 19 13 6 3 3 3 2 2 1 3 1 1 1 2 1 1 1 1 1 1 1 2 Avg $ per Tonne 171 264 317 371 49 465 51 56 62 66 76 768 82 859 93 957 12 156 111 1163 122 1257 136 1354 143 1471 153 1575 166 1661 176 1756 183 1855 195 196 2481 (b) 214, all varieties

Riverland Riverina Barossa Valley Murray Darling - NSW Murray Darling - VIC McLaren Vale Margaret River Coonawarra Langhorne Creek Padthaway Clare Valley Adelaide Hills Wrattonbully Yarra Valley Eden Valley Great Southern Tasmania King Valley Hunter Valley Heathcote Mornington Peninsula Goulburn Valley Orange Pyrenees Adelaide Plains Perricoota Fleurieu - other Currency Creek Hilltops Cowra Alpine Valleys 62 (cont). Distribution of winegrape prices across price points nationally, 28 and 214 (% of total tonnes crushed, from AGWA (214)) (c) 214, white varieties 63. Regional shares of national winegrape production value, 23 and 212 (%) 18 16 14 12 1 8 6 4 2 23 212

Riverland Barossa/Eden Valley Riverina Margaret River McLaren Vale Swan Hill VIC Langhorne/Curr Creek Murray Darling NSW Other Limestone Coast Clare Valley Rutherglen Great Southern Coonawarra Adelaide Hills Murray Darling VIC Tasmania Yarra Valley Hunter Mudgee/Cowra Mornington Peninsula West/Central Highlands Swan District Granite Belt Alpine V/Beech Canberra District Goulburn Valley Orange Murray Darling NSW Riverland Barossa/Eden Valley Riverina Margaret River Murray Darling VIC Clare Valley Other Limestone Coast Swan Hill VIC Langhorne/Curr Creek Yarra Valley Great Southern Coonawarra Adelaide Hills West/Central Highlands Alpine V/Beech McLaren Vale Mudgee/Cowra Rutherglen Hunter Goulburn Valley Mornington Peninsula Orange Granite Belt Canberra District Tasmania Swan District 64. Regional diversity in terms of grape and wine industry employment, 26 and 211 (a) Grape and wine intensity of regional employment (1 = national average) 8 7 6 26 5 211 4 3 2 1 12 (b) Regional shares of national grape and wine employment (%) 1 8 6 26 211 4 2

Barossa/Eden Valley McLaren Vale Riverina Murray Darling NSW Riverland Margaret River Clare Valley Swan Hill VIC Rutherglen Other Limestone Coast Great Southern Murray Darling VIC Langhorne/Curr Creek Coonawarra West/Central Highlands Adelaide Hills Tasmania Yarra Valley Orange Alpine V/Beech Hunter Mudgee/Cowra Mornington Peninsula Goulburn Valley Granite Belt Canberra District Swan District Murray Darling NSW Riverland Barossa/Eden Valley Riverina Clare Valley Other Limestone Coast Swan Hill VIC Murray Darling VIC Margaret River Rutherglen Langhorne/Curr Creek West/Central Highlands Coonawarra Great Southern Adelaide Hills Alpine V/Beech Orange McLaren Vale Mudgee/Cowra Yarra Valley Hunter Goulburn Valley Mornington Peninsula Tasmania Granite Belt Canberra District Swan District 65. Regional diversity in terms of grape and wine value added, 26 and 211 (a) Grape and wine share of value added of regional economy (%) 18 16 14 12 1 8 6 4 2 26 211 (b) Region s share of national grape and wine value added (%) 12 1 8 26 211 6 4 2

Percent 1 2 3 4 Percent 1 2 3 4 66. Regional Quality Index a dispersion, 21 and 212 1 2 3 4 5 RQI 21 1 2 3 4 5 RQI 212 a Regional Quality Index is defined as the ratio of the regional average price for all varieties to the national average price for all winegrapes.

Riverina Riverland Murray Darling - Swan Hill Cowra Goulburn Valley King Valley AUSTRTALIA Currency Creek Hilltops Geographe Langhorne Creek Limestone Coast - other Wrattonbully Heathcote Hunter Yarra Valley Bendigo Margaret River Clare Valley Great Southern Padthaway Grampians Mount Benson Barossa Valley Coonawarra Eden Valley Pyrenees McLaren Vale Adelaide Hills Riverina Riverland Murray Darling Swan Hill AUSTRALIA Cowra Goulburn Valley King Valley Mt Lofty Ranges - other Fleurieu - other Langhorne Creek Hilltops Limestone Coast - other Hunter Clare Valley Heathcote Wrattonbully Padthaway Great Southern Bendigo Adelaide Hills Margaret River Eden Valley Barossa Valley Mount Benson Grampians Coonawarra Yarra Valley McLaren Vale Pyrenees Tasmania Mornington Peninsula 67. Average price of winegrapes, by region, Australia, 213 (a) All varieties (AUD per tonne, V2 after quality adjustments) 3 25 2 15 1 5 (b) Shiraz (AUD per tonne) 25 2 15 1 5

Tasmania Mornington Pen. Rutherglen Hastings River Hunter Barossa Valley Pt Phillip Other Gippsland Cowra Eden Valley Bendigo McLaren Vale Pyrenees Clare Valley Yarra Valley Riverina Kangaroo Island Coonawarra Swan District Perricoota Currency Creek Hilltops Peninsulas Adelaide Hills Murray Darling VIC Riverland Blackwood Valley Langhorne Creek Great Southern Swan Hill VIC Swan Hill NSW Canberra NSW Murray Darling NSW Mudgee Padthaway Margaret River Orange Geographe Beechworth Alpine Valleys Granite Belt 68. Regional Quality Index diversity across climate zones, 1999 to 212 2.5 Hot Warm Cool 2. 1.5 1..5. 1999-1 22-4 25-7 28 21 212.8.7.6.5.4.3.2.1 69. Regional diversity in terms of winegrape varieties (Varietal Similarity Index), 21 and 212 21 21.

5 Percent 1 15 2 25 5 Percent 1 15 2 25 7. Varietal Similarity Index a dispersion, 21 and 21.2.3.4.5.6.7 VSI 21.3.4.5.6.7 VSI 21

71. Percentage change in winegrape bearing area, by region, 21 to 28 (%) Heathcote Southern Highlands Canberra (NSW+ACT) Perricoota Sunbury Beechworth Strathbogie Ranges Adelaide Hills Swan Hill (NSW) Hilltops Geographe Tasmania Pyrenees Queensland - other Mornington Peninsula Langhorne Creek Swan Hill (VIC) Margaret River Mudgee Bendigo Padthaway Orange 5 1 15 2 25 3 35 4

72. Change in winegrape bearing area, by region, 28 to 212 (ha) (a) Cool regions Wrattonbully Mornington Peninsula Robe Macedon Ranges Heathcote Port Phillip - other Tumbarumba Mount Lofty Ranges - other Southern Highlands Tasmania Beechworth Grampians Henty Canberra District (NSW) Mount Benson Yarra Valley Bendigo Alpine Valleys Adelaide Hills Coonawarra -7-5 -3-1 1 3 (b) Hot regions Riverina Lower Murray - other Perricoota Upper Goulburn Southern Flinders Ranges South Burnett Western Plains - other Swan District Murray Darling - NSW North West Victoria - other Swan Hill (NSW) Riverland Queensland - other Swan Hill (VIC) Murray Darling - VIC -7-5 -3-1 1 3

72(continued) Change in winegrape bearing area, by region, 28 to 212 (ha) (c) Warm regions Limestone Coast - other King Valley Fleurieu - other McLaren Vale Eden Valley Barossa - other Orange Geographe Southern Fleurieu Adelaide Plains Gippsland Big Rivers - other Pyrenees Blackwood Valley Glenrowan Geelong Sunbury Perth Hills Strathbogie Ranges Hilltops Goulburn Valley Clare Valley Rutherglen Manjimup Padthaway North East Victoria - other Gundagai Barossa Valley Granite Belt Pemberton Hunter Valley - other Margaret River Currency Creek Great Southern Cowra Langhorne Creek Mudgee Hunter -7-5 -3-1 1 3

Section III. Winegrape varietal developments since the mid-195s

1956 1958 196 1962 1964 1966 1974 1976 1978 198 1982 1984 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 212 73. Shares of Australian winegrape area, by varietal colour and quality, 1956 to 212 (a) Red and white, total 1 9 8 7 6 White 5 4 3 2 Red 1 1 9 8 7 6 5 4 3 2 1 (b) Red and white, premium and non-premium Premium red Premium white Non-premium red Non-premium white Other red Other white

1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 21 23 25 27 29 211 74. Shares of winegrape bearing area, by variety, 1956 to 212 (%, 3-year moving average) 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Syrah Cabernet Sauvignon Merlot Pinot Noir Garnacha Tinta Other Red Chardonnay Sauvignon Blanc Semillon Pinot Gris Riesling Muscat of Alexandria Doradillo Sultaniye Palomino and Pedro Ximenes 75. Shares of winegrape bearing area, by varietal country of origin, 1956 to 212 (%) 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 1956 195819619621964196619681971972197419761978198198219841986198819919921994 1996199822224262821 212 France Germany Spain Greece Italy Portugal United States Turkey Croatia Austria United Kingdom Thailand Switzerland Lebanon Australia

Variety 1 Variety 2 Variety 3 Variety 4 Variety 5 Variety 6 Variety 7 Variety 8 Variety 9 Variety 1 Variety 11 Variety 12 Variety 13 Variety 14 Variety 15 Variety 16 Variety 17 Variety 18 Variety 19 Variety 2 Variety 21 Variety 22 Variety 23 Variety 24 Variety 25 Variety 26 Variety 27 Variety 28 Variety 29 Variety 3 syrah chardonnay sauvignon blanc pinot gris merlot pinot noir viognier riesling muscat blanc a p. g. tempranillo petit verdot cabernet sauvignon gewurztraminer durif colombard sangiovese tribidrag savagnin blanc arneis nebbiolo verdelho 76. Change in bearing area for most-expanded varieties, Australia, 21 to 212 (ha) 14 12 1 8 6 4 2 77. Cumulative shares of Australian winegrape area, by main varieties, 1956, 1984 and 212 (%) 1 9 8 7 6 5 4 3 2 1 1956 1984 212

Syrah Chardonnay Cabernet Sauvignon Merlot Sauvignon Blanc Semillon Pinot Noir Riesling Pinot Gris Muscat of Alexandria Colombard Garnacha Tinta Verdelho Petit Verdot Viognier Gewurztraminer Muscat Blanc a Petits Grains Ruby Cabernet Monastrell Tempranillo Sangiovese Cabernet Franc Chenin Blanc Durif Cot yield (t/ha) percent 78. Shares of national wine area, production and exports of key varieties, and yield per ha, 212 3 25 2 15 1 5 Area (ha) Production (t) Exports(l) Yield 3 25 2 15 1 5 79. Angular separation between two regions, each growing two grape varieties Percentage planted to Variety n 6 4 2 4 8 Percentage planted to Variety m

8. World s top 35 varieties in 21, compared with 199 and 2 (hectares) 81. Bearing area of Syrah, key producing countries, 2 and 21 (hectares) 8 7 6 5 4 3 2 1 2 21

82. Australian regions with largest Varietal Intensity Index relative to global average, key red varieties, 21 and 21 Cabernet Sauvignon 21 1 21 9 8 7 6 5 4 3 2 1 Langhorne Creek Currency Creek Padthaway Mudgee Margaret River 35 Pinot Noir 21 21 3 25 2 15 1 5 Mornington Peninsula Tasmania Yarra Valley Adelaide Hills Alpine Valleys 3 Syrah 21 21 25 2 15 1 5 Bendigo Barossa Valley McLaren Vale Pyrenees Rutherglen

83. Australian regions with largest Varietal Intensity Index relative to global average, key white varieties, 2 and 21 3 25 2 15 1 5 Riesling 21 21 Eden Valley Clare Valley Tasmania Great Southern Adelaide Hills 9 8 7 6 5 4 3 2 1 Adelaide Hills Margaret River Sauvignon Blanc 21 Great Southern Geographe 21 Tasmania 4 35 Semillon 21 21 3 25 2 15 1 5 Hunter Margaret River Riverina Geographe Great Southern

Sultana Colombard Trebbiano Ruby Cabernet Muscat Gordo Blanco Crouchen Verdelho Chenin Blanc Marsanne Semillon Petit Verdot Traminer Viognier Durif AUSTRALIA Sangiovese Chardonnay Mataro Dolcetto Sauvignon Blanc Merlot Arneis Grenache Riesling Pinot Gris Tempranillo Zinfandel Shiraz Malbec Cabernet Sauvignon Cabernet Franc Pinot Noir 84. National average prices of main winegrape varieties, a 213 (AUD per tonne) 1 9 8 7 6 5 4 3 2 1 a These are the varieties with the largest bearing area in Australia, using the varietal names most commonly used in Australia (as distinct from the prime varietal names used above).

5 Percent 1 15 2 25 5 Percent 1 15 2 25 26 85. Varietal Quality Index a dispersion, Australia, 1999 and 212.5 1 1.5 2 VQI 1999.5 1 1.5 2 VQI 212 a The Varietal Quality Index is defined as the ratio of the national average price for a variety to the national average price of all winegrape varieties. 26

Winegrape Price ($ A/tonne) Winegrape Price ($ A/tonne) Winegrape Price ($ A/tonne) Winegrape Price ($ A/tonne) 86. Winegrape price and mean January temperature, select varieties, 26 (AUD/t) (a) Key red varieties 22 2 18 16 14 12 1 8 6 4 2 22 2 18 16 14 12 1 8 6 4 2 Shiraz 18 19 2 21 22 23 24 25 26 Av Regional MJT (Celsius) Merlot 18 19 2 21 22 23 24 25 26 Av Regional MJT (Celsius) 22 2 18 16 14 12 1 8 6 4 2 22 2 18 16 14 12 1 8 6 4 2 Cabernet Sauvignon 18 19 2 21 22 23 24 25 26 Av Regional MJT (Celsius) Pinot Noir 18 19 2 21 22 23 24 25 26 Av Regional MJT (Celsius) (b) Key white varieties 22 2 18 16 14 12 1 8 6 4 2 22 2 18 16 14 12 1 8 6 4 2 Chardonnay 18 19 2 21 22 23 24 25 26 Av Regional MJT (Celsius) Sauvignon Blanc 18 19 2 21 22 23 24 25 26 Av Regional MJT (Celsius) 22 2 18 16 14 12 1 8 6 4 2 22 2 18 16 14 12 1 8 6 4 2 Semillon 18 19 2 21 22 23 24 25 26 Av Regional MJT (Celsius) Riesling 18 19 2 21 22 23 24 25 26 Av Regional MJT (Celsius)