Reading about the current whisky loch set me thinking about the glut of another alcoholic drink, my favourite one, wine.
Whereas some distillers have had to build new warehouses to mature their excess stock in, that’s not an option for the great majority of wine produced today, which is designed to be drunk within a year. Moreover, while Jim Beam can simply choose to close down its much-advertised production base in Kentucky for at least this calendar year, just as any distiller or brewer can simply pause production, no such option is available to wine producers. Vine growers are presented with a crop every autumn or, increasingly, late summer.
Grapes are currently ripening relentlessly in the southern hemisphere, but what will happen to them? The generic body Wine Australia admits that producers there have nearly twice as much wine in stock as they can reasonably expect to sell, and sales are in decline pretty much everywhere, even in Australia itself. Tanks full of wine, and a relatively generous 2025 grape crop, have led to widescale cancellation of grape contracts and a substantial proportion of grapes are expected to be left on the vine yet again this year.
Along with the most beleaguered wine districts of Bordeaux and the southern Rhône (whose wines can be found retailing in France for less than €2 a bottle), the irrigated inland wine regions that supply 70 per cent of all Australian wine are some of the world’s most obvious casualties of shrinking global demand. To add insult to injury, irrigation water has recently become much more expensive. Growers there feel particularly sore when they read of government-provided financial compensation to French vignerons who pull out vines.
Things are not helped by the fact that Australian wine production is dominated by two large, globally spread companies that would have been expected to absorb much of the surplus wine had their prospects been brighter. Treasury Wine Estates owns brands such as Penfolds and Wynns in Australia, and a slew of California wine brands, some acquired relatively recently. It warned investors that profits in the second half of last year would be considerably less than expected because of the weakness of its two biggest export markets, the US and China. The other large Australian wine group, whose name was recently changed from Accolade to Vinarchy and whose answer to TWE’s Penfolds is Hardy’s, took on Pernod Ricard’s brands when the French drinks group gave up on wine in 2024. It is currently pinning its hopes on a revival of the likes of Jacob’s Creek of Australia and Campo Viejo of Spain.
It was powerful red wine, especially Shiraz, that led Australian wine’s export boom at the end of the last century and such wines are by far the chief product of the country’s most challenged wine regions. But global tastes are moving towards white wine and lighter, fresher reds.
Kim Chalmers of Chalmers Nursery, the leading supplier of grapevines to the Australian wine industry, is based in inland Mildura, where the biggest winery by far was shut down by Treasury Wine Estates in 2024. She reports that growers in the region “are busy grafting-over or replanting to whites, although the swing has been hard and, like all reactionary permanent-planting changes in agriculture, we could see the pendulum go too far”. Chalmers points out that spot market pricing for 2026 white grapes is already lower than in recent years. “Industry bodies have started calling it an overcorrection.”
Even New Zealand, long considered a bright spot in wine exports with relatively high prices and a predominance of white Sauvignon Blanc, is currently suffering a glut.
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It’s commonly believed in wine circles that the global downturn in consumption may not be disastrous overall because it will mean that consumers will drink less but better. I too expected wine to be seen increasingly as an occasional luxury, with mid-priced wines prospering and bottom-shelf supermarket wines the most obvious casualties.
However, when I asked my wine writer colleagues in Italy and Spain, the world’s first- and third-biggest wine producers respectively, which wine regions in their respective countries were doing best, the results were surprising. Both reported that those regions which are suffering least are those that sell wine in bulk, the cheapest sort of wine available. According to Walter Speller’s UK-based Italian wine broker informant, the only wines that are doing well are those that are being sold to the trade for €2 or less a bottle. There’s reluctance to lose face by admitting to personal difficulties but most regions report cellars full of unsold wine.
Unlike the Italians, Spanish wine producers are swamped by efficiently collected statistics on sales volumes and prices for each region. According to the most recent figures, for the first nine months of 2025, the extensive Rioja region, heavily dependent on red wine and currently celebrating the centenary of its becoming Spain’s first official appellation in 1925, is under real pressure with the volume of exports down by 18.5 per cent. Sparkling white Cava may dominate wine production in Catalonia but its sales have slumped even more. Two of the few Spanish wine regions registering growth are Valencia and Castilla-La Mancha, the latter being one of the world’s major suppliers of bulk wine (and grape concentrate), at an average of about €47 a hectolitre, or €0.47 a litre. Germany and France are the two biggest buyers, much to the dismay of the Languedoc’s militant vignerons over the Pyrenees.
Ciatti, headquartered just south of Sonoma in California and with branches in 10 of the world’s major wine-producing countries, is the world’s leading bulk wine broker but even it reports that its customers are ordering relatively small volumes.
Fortunately for Australia, this year is not looking like a bumper crop and the harvest won’t be as hot and rushed as last year. Ciatti partner and president Greg Livengood expects the total 2026 southern hemisphere grape harvest that will be picked in the next few months to be very slightly smaller than in 2025, helped by a considerable reduction in Chile’s productive vineyard area. South Africa’s wine production is more or less in balance but Argentina, like Australia and New Zealand, is already oversupplied with bulk wine and he is advising stockholders to try to sell, “even at less-than-ideal pricing”.
We can expect to see white and pink southern hemisphere 2026s on our shelves in the next few months from producers desperate for cash flow, but presumably the wine trade’s professional wine buyers can more or less dictate prices.
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For detailed tasting notes, scores and suggested drinking dates see JancisRobinson.com. For international stockists see Wine-searcher.com.
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