Australian Drought is Bad News for Cheap Wine Drinkers

Just a few days ago I was commenting on how it amazes me that with shipping costs and all we are able to get inexpensive wines all the way from Australia.  Well that may not be the case for long, but not because of shipping costs, drought is the culprit.

Australia has been suffering its worst drought in more than a century and the wine industry predicts grape production to be cut in half by the drought.  This means that by the law of supply and demand, Australian wine prices will be going up.

This is a big change for Australia, where for the past few years we’ve seen a glut of wine grapes resulting in good cheap wine available worldwide.

While it’s bad news for consumers of inexpensive wines, it’s worst news for Australian wine grape growers, many of whom may be driven out of business by the drought.  Read more in The Sydney Morning Herald.

Aside from driving up prices, the other side effect of the drought is that the wine that is produced is likely to taste different.  The drought is creating vines with smaller grapes that have higher sugar levels and lower acidity.  In some cases this could be good, in some cases bad.  Read more in The Australian.

And my own two cents… even if you don’t normally drink Australian wines this could impact your pocketbook.  Again, I go back to the law of supply and demand.  If we see a dramatic decline in the quantity of Australian wine entering the market, that will drive up demand for wine from other regions and consequently drive up prices for wine from all regions.  Yikes!