Aussie wine grape harvest hit

DROUGHT and unexpectedly cool weather conspired to cut Australia's wine grape harvest by 10% this year, its first fall for six years.

The 2003 vintage fell to 1.36m tonnes, the Winemakers' Federation of Australia said today. White grapes fell 16% due to reduced yield and because of limited plantings in recent years in an attempt to reduce oversupply. The red grape harvest was down 5%.

However, the lower crop is unlikely to lead to higher prices at the off-licence as robust competition should keep a lid on price rises.

Wine Federation policy director Stephen Strachan welcomed the lower vintage, saying that it would help ease problems of oversupply.

'With the dramatic increase in wine grape plantings until 1999, the 2002 and 2003 vintages were always going to challenge the industry's capacity to grow markets quickly enough to sell the finished product as profitable, branded wine,' Strachan said.

'The lower intake of reds in particular relieves that pressure considerably and the industry will be able to maintain export growth without the added pressure of having to move excess stock before the next vintage,' he added.

The Australian Bureau of Agricultural and Resource Economics believes that the downturn is a temporary phenomenon and forecast that - assuming the drought breaks - the 2004 vintage will be 1.72m tonnes with a further rise to 1.77m tonnes expected in the following year. For oenophiles, the good news is that the lower yields have not damaged quality. The vintage was rated above average to excellent.