Over-production in the Australian vineyard has been hovering around for several vintages now, with little movement towards a re-balanced grape economy.

The large-listed wine companies did it quite simply at a board level and signed off for large vineyards to be grubbed out (were the worst performing in the assets portfolio) or offered a series of vineyards for sale (Fosters listed over 30).

Today most of those have been sold to interested parties though some remain on the books and have not been moved along. They would be posing as disease bombs because they would be left without any management, and some vines will die.

Several industry commentators have remarked how slowly the Australian wine map is changing: that re-adjustment of the national vineyard is rather slow, and that production has not really declined despite the ever-present glut.

One has to look at the nature of the over-planting from the start.

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All sectors are responsible: managed investment schemes, listed companies, private family wineries, private investment growers, traditional growers right through to the 1800 small brand owners who have contributed by “adding a few more hectares of new vines”.

Some regions have simply not re-adjusted. In the 2010 harvest, 13,000 odd hectares of vines out of the total of 160,000 were not harvested due to no demand for the grapes.

These were mainly growers’ grapes. They sat on the vine and were converted into carbon. However those vines are still in the ground and capable of re-igniting the spectre of over-production in 2011.

The first evidence of vineyard adjustment in New South Wales in 2011 emerged late last week with a survey by the Newcastle Herald revealing 46 percent of Hunter Valley vineyards were no longer there. That was 3250 has reduced to 1750 during the past year or so.

The majority of vines have been lost in the Upper Hunter where the larger grower population is found. That’s also where the once famous large Rosemount winery was situated, and that has been gutted for want of a buyer for five years.

Also the Hunter Valley is home to Australia’s major wine tourism market, so despite being buffered by tourists who pay the highest retail prices, this sector of the industry is leading the adjustment phase very well.

Most Hunter Valley proprietors now chase the over USD15 market and varieties that are in demand.

Industry veteran and managing director of Tyrrell’s Wines in the Hunter Valley, Bruce Tyrrell described the market as the toughest he had seen.

Mr Tyrrell said producers who survived the next few years would have no choice but to come out stronger, more focused and making better quality wines.

He predicted a return to practices of 50 years ago with operators selling the majority of wine direct to consumers.

‘‘There were many vines planted in the wrong place, for the wrong reasons and they will all have to come out.’’

By March 2010, 6600 hectares, or 4.3 per cent of Australia’s plantings, had been removed with an additional 13,000 hectares not harvested.

If the industry removal estimate is 20 percent of production, the final amount to uproot is 32,000 hectares. Ouch!

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