Wildfire Smoke Sparks Worries for Australian Wine Growers

(Bloomberg) -- The devastating wildfires that swept through the east and south of Australia in recent months could have yet another consequence -- spoiling some of the 2020 wine vintage in a country that counts China, the U.S. and the U.K among its biggest customers.

While most vineyards escaped direct damage from the inferno that claimed almost 30 lives and destroyed more than 2,700 homes, some growers are anxious to see if grapes have been contaminated by direct exposure to the choking smoke which has blanketed many rural areas as well as major cities.

Wildfire Smoke Sparks Worries for Australian Wine Growers

The fires destroyed swathes of vines in the Adelaide Hills and pockets of production in New South Wales and Victoria, but the affected area represents just 1% of the country’s vineyards, said Tony Battaglene, chief executive officer of industry group Australian Grape and Wine. Major inland growing areas along the Murray River and in Western Australia have been unaffected, he said.

“The bigger impact is the potential for smoke damage,” he said in an interview Tuesday. But the so-called smoke taint, where grapes develop unpalatable flavors or smells like ash or wet cigar, is hard to measure, and grapes can’t be checked until they start to ripen, which will happen in the coming weeks.

Wildfire smoke has hurt some previous Australian vintages and become a bigger issue in places like California, Oregon and parts of Canada and South Africa in the past decade. Australia’s La Trobe University is developing early detection tools to help growers assess the damage.

Australia is the fifth-biggest wine producer, according to Wine Australia, and exports about 60% of its output. Shipments were worth $2.89 billion in the year ended September, with mainland China, the U.S. and U.K. the top markets.

Even before the fires, this year’s vintage was already suffering from drought. The grape crush could be down from the 1.73 million tons harvested in 2019, and even slump as low as 1.6 million tons, Battaglene said, supporting prices.

Climate change and fire risks are now being built into long-term planning, with a focus on water conservation and vineyard design, Battaglene said. Growers are increasingly planting Spanish varietals, more suited to warm climates than the French ones that Australia has traditionally focused on.

©2020 Bloomberg L.P.

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