Wine is still Australia’s most popular alcoholic drink – but many producers face an uncertain future, writes the University of Wollongong’s Paul Chad.

Australia has become world-famous for its wine, but the industry faces an uncertain future. Too many grapes grown amid falling consumer demand, an oversupply of budget wine, and an undersupply of premium wine are just some of the problems besetting the industry.

There are still many small and medium-sized wineries across Australia. But the industry is dominated by a few large players, as well as “vertical integration” with ownership linkages between wineries and retailers.

Just this month, a merger between global drinks giant Pernod Ricard’s Australian, New Zealand and Spanish wine brands and Accolade Wines (one of Australia’s largest winemakers) was completed, creating a new giant – Vinarchy – to be based in Adelaide with A$1.5 billion in annual revenue.

This move will involve an estimated cull of up to 50 wine brands, which speaks to a broader story of growing concentration. Numerous Australian wine companies have come up for sale in recent years, and the industry is undergoing rationalisation.

The current pressures will require an overall reduction in wine production, and a focus on premium over ordinary wines. Grape-growers and some smaller wineries are likely to be most affected.

According to Wine Australia, the Australian wine industry currently has about 6000 grape growers and 2156 wineries. It employs 163,790 people (full- and........

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