Wine In Australia: Environmental Economic And Social Challenges

The nature of wine

Wine is an alcoholic beverage made from the process of fermenting grapes. There are different varieties of grapes, with alternative levels of yeast, in which produce unique tastes and colours, typically classified as either red, white or rose (mixture of red and white). These variations result from the a variation of interactions involving the development of the grapes used to create the wine, the reactions of fermentation, the terroir, as well as the production process and techniques that wine producers use depending on their climate and other conditions. Wine can also be made, not only from grapes, but from other sugar-heavy products such as honey, and fruits, as well as rice (Asia).

Wine is most commonly packaged in glass bottles but can also be packaged in casks (silver plastic bladders), and then closed with a cork to protect the wine from oxidisation (50% of corks come from Portugal). Prices are determined by the popularity, style and age of a wine. Older, rarer wines tend to attract a higher price tag, as do wines that come from popular wineries or well-known wine regions, such as Barrossa Vally or Margaret River.

Wine in Australia

Australia’s history of wine manufacture traces back to its settlement in 1788, Sydney. By the 1890’s, the popular Hunter Valley, Barossa Valley, and Yarra Valley had begun to produce wine. Now, the Australian wine industry is the world’s fifth largest exporter of wine (refer to Figure 2 Australian export snapshot) with approximately 780 million liters a year to the international export market with only about 40% of production consumed domestically. The wine industry is a significant contributor to the Australian economy through production, employment, export and tourism.

The wine industry will be one of the most effected by climate change, but in reality, the agricultural industry as a whole is a major cause of this. With the use of fertilizers, pesticides, soil, land, water, and energy it’s responsible for approximately 20% of all greenhouse gas emissions. And wine production is no exception, the process of growing grapes and transforming it into wine, contributes to those effects as well.

How does climate change effect the Australian wine industry?

Climate change refers to any significant change in the measures of climate lasting for an extended period of time, such as in temperature, precipitation, or wind patterns, among other effects, that occur over several decades or longer. Terroir is how a particular region’s climate, soils and aspect (terrain) affect the taste of wine, so with the climate changing rapidly, the terroir will be strongly effected.

The production of high-quality wine is dependent on a number of factors, such as those that impact the terroir (climate, soils, and aspect), as it makes its way from vine to bottle. In the vineyard, however, the climate is highly influential, holding the power to make or break style, quality and flavour of the grapes.

Economic challenges

The quality and quantity of wine, and its prices and revenues, are extremely sensitive to the weather where the grapes were grown. Prices in the same year for wines from the same grape type can vary enormously depending on where the grapes were grown, with grapes grown in suitable climates fetching a higher price. For example, due to pristine conditions in Barossa, three of the most expensive wines in Australia are produced there, the most expensive being valued at $743. As increasing hot weather impacts harvests, wine producers are struggling to maintain quality and quantity of wine, which may result in the decline in supply of certain types of wine, resulting in an economic loss.

Eventually, producers will have to replant with grape varieties that are more heat and drought-tolerant. For example, in Australia said it would be uneconomical to produce chardonnay type wine, as it would cost more to grow than it earned. This is not just Australia’s problem – its global.

Environmental challenges

The ability to manage the impact of heatwaves, drought, increased risk of fire and salinity has become a significant part of vineyard management in the Australian grape and wine community. In warmer weather and climates, grapes will ripen more easily, leading to lower acidity, higher sugar levels, and darker colour.

In 2015, a report conducted by the Climate Council found that 70% of wine producers in Australia, who relied on certain climates, were finding that their crops were being impacted by the effects of climate change. They concluded that “with higher temperatures causing earlier ripening and reduced grape quality”, growers were facing a number of challenges that were virtually unheard of just 5-10 years earlier.

Due to climate change, in South Australia rainfall in autumn and early winter has only reached the long-term average a handful of times (refer to figure 4) in the past 25 years. This is very challenging, as South Australia is consistently responsible for about 50% of Australia’s annual production and 75% of premium wine production. In 2007-2009, 93.1% of vineyards in South Australia used irrigation other than rainfall, in comparison to 86% in 2005-2006. Nationally, the proportion of vineyards using irrigation has increased to 88.3% in 2008.

Social challenges

Researchers have stated that due to climate change, wines are riper and richer and have higher alcohol content, and as a result of this has strongly influenced the style of wine as well as the culture of wine and it’s tourism in Australia (refer to figure 5). Many frequent visitors of Margaret River, as well as it’s locals and wine producers are generally very concerned for the future of its wine production and reputation. Located 250km from Perth, Margaret River is currently the most visited regional destination in Western Australia, known for it’s good food and wine. Considering the tourism industry is worth $10 billion a year to the state economy and employs more than 100,000 West Australians, if climate change further destroyed the Margaret River wine production, reducing the demand for viticulture products, this would result in a massive loss for the Australian economy, resulting in an increase in the unemployment rate, which in turn results in decreased income, increased income inequality, and a decreased demand for consumer goods. As tourism is a key economic driver, there would be many social effects if it were to decline, including severe financial hardship, debt, housing stress, and increased crime etc.

Mitigation strategies by Australian wine makers

The Australian wine industry’s impressive record in terms of investing in research and development, and engaging in collaborative initiatives such as education, self-regulation and having a ‘quality’ production focus, is testament to its commitment the many impacts due to climate change. Although, there is much to be done before I can formally announce compliance with the environmental management expectations of its markets, in the general public and government. There are a number of fronts on which the wine industry has an opportunity to further improve its performance.

Canopy management can be defined as a portfolio of vineyard management techniques, which manage a grapevine’s canopy from the time of winter pruning until harvest time. Canopy management makes for a less dense canopy – therefore better fruit exposure. These practices aim for a more open canopy with a larger canopy surface area. This means higher rates of photosynthesis and rates of transpiration. Canopies help reduce susceptibility to certain diseases especially fungal diseases, allow better air circulation, and allows better spray penetration. Producers in Australia have concluded that canopy management has had a positive impact on both vine yield and ultimately wine quality.

Relocation (to Tasmania): Tasmania is very credible for its cool-climate. It is home to some of Australia’s most diverse, unique wines and has built its reputation firmly on quality rather than quantity. With almost 175 hectares planted to grape vines and home to 160 producers, Tasmania’s output accounts for less than 1% of Australia’s total wine production yet it represents 10% of the premium wine segment.

In consideration of Tasmania’s pristine environment, cool climate and fine food scene, researchers have recommended that producers relocate as other regions prepare for a future impacted by global warming – to regions such as the Tamar Valley (refer to figure 6). Research shows that if producers chose not to relocate, they would in fact suffer from a loss, whereas is they relocated to Tasmania they would have the ability to continue to distribute their wine, as well as increasing the quantity and quality of wine.

Mitigation of climate change

The earth’s surface is warming and this is directly linked to greenhouse gas emissions. Agricultural and forestry producers (refer to figure 7), which include viticulture, account for approximately 21% of the GHG emissions generated in Australia. While the biggest contribution to these emissions comes from livestock production, the wine-grape sector also needs to play a part in the emissions reduction. One of the most prominent wine growing areas in Australia, Margaret River is in danger of the effects of climate change and needs to mitigate fast in order to maintain its reputation of good food and wine. Margaret River wine producers are doing the minimum in order to prevent the effects such as canopy management and placement based on seasons, but it would be worth while to consider other methods of mitigation in the long run, such as, bunch zone clay-based sprays that protect the fruit from the sun, and irrigation methods to provide the vines with water.

Bunch zone clay-based sprays, also known as sunscreen for wine, protects the grapes from the heat of the sun, and prevents degradation. In Hunter Valley, there was a trial was conducted to assess the usage of the products on heat events. Hunter Valley (one of the main economic wine contributors – refer to figure 9) trial demonstrated there is value in applying sunscreen products prior to a heat event. When a sunscreen is applied prior to a heat event, grapes may maintain quality rather than be downgraded, ripening may be earlier – this is especially important where there are risks associated with late ripening, e.g. increased risk of rain or more heat events. Operating costs, such as irrigation or fungicide sprays, may be reduced or avoided due to earlier harvest, and processing grapes in the winery may be easier. Quicker pressing and better settling means additional time is not lost with often occurs with heat affected grapes. The trial, from the observation, stated that the level of sunburnt branches observed between sunscreen treated areas was minor, indicating that this method is worthwhile, and in the long run will help to mitigate the effects of climate change. With the temperatures in Margaret River, among many other regions in Australia expected to increase by 0.25 degrees Celsius in the next year, using sprays to act against heat would be worth while for the industry.

Irrigation: As well as introducing sprays that mitigate against climate change, it is also worth-while to optimize vineyard irrigation. Although irrigation of vines is a necessary part of vineyard management in several wine growing regions, where winegrowers completely or partly rely on irrigation water. With irrigation, winegrowers have abilities to manipulate vine growth and grape quantity and quality. Since water is a limited resource and its price constantly rises, every winegrower tends to improve water use efficiency and use natural resource more sustainably. Currently, Agriculture used 50-70% of the water consumed in Australia per annum and irrigation uses 90% of that. Irrigation can cause increased water costs, but there are ways around this, which involve installing the irrigation system that best suits your needs and vineyard structure, monitoring of soil moisture and evapotranspiration, and to maximise green water use, which refers to water that is sourced directly to the vineyard from natural sources, such as rainfall. In recent years, the use of irrigation has decreased the prices, and increased the production, as present in the Murray-Darling Basin (figure 10), in with accounts for 80% of Australia’s total irrigated grape production.

Conclusion

While it is true that global warming is one of the biggest challenges that the Australian wine industry has faced in recent times, it would be amiss to suggest that it signals the end of wine as we know it. Indeed, for a community known for its ability to adapt to the circumstances it is presented with, the coming years are sure to be characterised by innovative and influential methods of producing wine in the face of climate change, although it would be a tragedy if places like Margaret River and the Barossa Valley were to diminish.