Lower grape harvest will drain wine lake

SYDNEY - Australia, the biggest wine exporter outside Europe, may harvest 5 per cent fewer grapes this year as vines produce less fruit - thus helping cut a wine surplus that has contributed to a drop in export prices.

The Australian Wine & Brandy Corporation, the industry regulator, said yesterday that the January-to-April harvest might reach about 1.82 million tonnes. Last year, Foster's, Southcorp and the other 1800 wineries crushed a record 1.92 million tonnes after vines yielded about 7 per cent more grapes than average.

"The prospect of an average-yielding season will be viewed with some relief by winemakers holding more-than-comfortable levels of red wine in stock," the corporation said. Australian viticulturists are lowering crop yields to improve wine quality in an effort to stem declining prices amid rising competition from the US, South Africa, Chile and Bulgaria.

The average value of a litre of wine sold overseas fell 6.4 per cent in the year to June 30 after a 2.1 per cent decline in 2002-03.

"To reach quality targets and reduce disease, many growers have thinned bunches as well as managed canopies to expose the fruit to sufficient sunlight," the corporation said.

"[This year's] cooler conditions are generally providing a steady ripening environment in which superior colour, flavour, acid and varietal definition are developing in the grapes."

- BLOOMBERG