The total estimated value of the 2022 crush at the weighbridge was $1.21bn, according to the National Vintage Report published this week. The estimated value was a decrease of $335m (22%) compared with the record 2021 value, but $60m more than in 2020 and $8m higher than in 2018, a year when the crush was 2% larger. The value reduction compared with 2021 was a result of the reduced crush, combined with a reduction in the overall average value.
The reduction in crush compared with 2021 is the equivalent of approximately 190 million litres of wine – more than the most Australia ever exported to mainland China in a 12-month period.
The reduction in volume is likely to be the result of a combination of factors: such as seasonal influences, winery production capacity limitations, and adjustments made by winemakers as they respond to market conditions.
“After a record high vintage in 2021, a lower yield in general was expected due to reduced cropping potential,” explained Wine Australia Manager of Market Insights, Peter Bailey. “This natural variation was compounded by a number of significant seasonal effects – in particular heavy widespread spring and summer rainfall across much of the eastern half of Australia and a number of significant hailstorms.”
“Apart from seasonal effects, the 2021–22 season was challenging as a result of winery production capacity limitations going into vintage following the record harvest in 2021, compounded by reduced exports to mainland China and severe shipping disruptions that caused delays and escalated costs.
“Lack of winery production capacity, together with reduced exports and softening prices for red wines, may have resulted in wineries and growers reducing their overall production and/or intake of grapes – particularly red varieties. However, it isn’t possible for our survey to separate normal seasonal fluctuations in yield and weather events from active strategies to reduce intake.”
One feature of this year’s winegrape crush is a shift back towards white varieties: with the share of white varieties increasing from 43% in 2021 to 45% in 2022.
“Demand is shifting back in favour of white varieties,” Mr Bailey said. “The average value for white winegrapes has increased every year since 2014, and in 2022 was the highest since 2008.”
Like other sectors, the wine and grape industry expects to be hit by rising costs.
“Experiences differed across the country but there is no doubt that some grapegrowers have had a very tough year, with seasonal conditions and profitability hit by the significant reduction in red winegrape prices combined with escalating costs including fuel, fertiliser and energy,” Bailey said.
“Looking forward from this vintage, growing demand through the joint strategies of market intensification and market diversification is the key to ensuring sustainable winegrape prices.
"Pleasingly, data is showing that there is demand for Australian wine in our major export markets such as the US and the UK, particularly in premium price segments.
“There is also growth in a range of Asian markets, including Singapore, Japan, South Korea, Vietnam, Thailand and Taiwan. Wine Australia is working with the sector to identify new opportunities in these markets and in others, as well as developing new products and channels within the Australian domestic market.”