Being a wine expert in the UK has been a cheap pastime for a decade. The price of a bottle of plonk, however, is about to rocket. Global factors such as lousy weather and bad harvests mean some international markets will no longer be able to sustain growth. Wines under the all-important £5 mark will be harder to achieve, say experts, who also predict that more brands and manufacturers will collapse following the demise of Orbital earlier this year. Australia, the UK's biggest wine supplier with 24% of the off-trade, could be among the worst hit. Drought, harsh frosts, bush fires and locusts plagued Australian grape-growing regions in 2006, resulting in an unusually small vintage last year. And the vintage for the next 12 months will be even smaller. "Previously we were producing about two million tonnes of grapes a year where there was only a sustainable market for about 1.6 million tonnes," says Stephen Strachan, chief executive of the Winemakers' Federation of Australia. "That meant we were able to trade successfully at the lower end of the market. The flipside is that we became known for discounting and little else." But the worst is yet to come for Australians. With the 2008 vintage about halfway through, predictions are for a second shortfall. "It's too early to tell what volumes we are talking about, but we have no doubt this vintage will be down," says Strachan. The bad news will mean fewer price deals but more worrying is the loss of several Australian wine brands, some of which simply won't appeal to consumers without the pull of attractive discounts. "It's going to be a watershed year for Australia," Strachan predicts. "We need to prove we can now build a sustainable business in the UK, but we are all expecting casualties." Other countries are experiencing smaller-than-average harvests, too. "Everyone is talking about availability issues in Australia but Europe is also suffering," says Laura Jewell, Master of Wine and agency director at wine importer and distributor HwCg. Thanks to a poor summer in Europe, there are problems sourcing Pinot Grigio in Italy and supply issues across most of France, according to Jewell. And if supply issues are expected to lead to price hikes, rises in raw material costs are equally significant right now. "The cost of dry goods such as glass, cork and labels is increasing, which could affect pricing," says Jo Mason, UK market manager for Wines of South Africa. In addition, all the wine experts that spoke to The Grocer fear Alistair Darling intends to raise tax on alcohol. "The alcohol and health debate is being politicised," says Michael Cox, UK director of Wines of Chile, "and the government is poised to wield a very large hammer over the nut." The sombre mood in the industry reflects the shockwaves being felt following the collapse of Orbital Wines last month - owner of South African brand Stormhoek and Australian brand Camden Park. Meanwhile, Boutinot Wines has said it is looking for a buyer, signalling more consolidation or closures. "We'll see a further five to 10 more 'Orbitals' in the next 12 months," says Matthew Dickinson, commercial director of Thierry's Wine Services. "Brands will be sold off as the sector fights the trading conditions. New brands that don't have strong supplier/retailer relationships won't make it." Some have more grounds for optimism than others. John McLaren, UK director at the Wine Institute of California, says shortages are unlikely to be a problem, though he admits that "price increases from competitors may compromise some stock situations," and there will also be pressures on some emerging styles. "We think 2008 will be a year of balancing stocks, with some new opportunities arising from shortages elsewhere, but increased competition from the Old World, including an invigorated France and a possible rebirth for Germany," he adds. In the meantime, the French believe Britain's continuing love affair with rosé wines will give France an advantage over other countries thanks to the diversity of rosé styles, and Sopexa is also encouraged by a movement away from what it calls "over-jammy, parkerized, heavy alcohol wines towards more fresh and elegant styles". But if the year ahead looks tough for the Australians in particular, the economy is not promising relief for exporters across the globe. "The economic climate looks fragile," Mason laments, "so consumers are likely to be cautious about spending."n

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