Wine Aus. CEO says sector is at 'critical crossroads,’ but 2025 a chance to reset

Currently the fifth-largest wine producing country globally, Australia’s wine industry has an estimated value of $45 billion and produces around 1.2 billion litres of wine every year.

The industry also plays a crucial role in supporting jobs across agriculture, manufacturing, and tourism. Over 160,000 people are currently employed across Australia’s 65 wine-growing regions, including more than 6,000 winegrape growers and over 2,000 wine producers.

However, experts warn that Australia's grape and wine industry is at a critical moment in its development as pressures facing wine globally continue to impact production domestically.

Here, CEO of Wine Australia Dr Martin Cole gives an overview of the opportunities and challenges that lie ahead:

“Australian wine is navigating a changing landscape full of opportunities and challenges. 2025 will be an important year for the industry as we reset our path to long term sustainability and success.

The Australian grape and wine sector has been at a critical crossroads for some time. This year presented glimpses of encouragement and optimism; however the reality is that the challenges are far from resolved. Faced with declining global consumption, climate challenges, an oversupply of red wine, and evolving consumer preferences, 2025 presents a pivotal year for the entire sector to implement strategic actions and navigate towards a sustainable and profitable future.

This year’s launch of the One Grape & Wine Sector Plan has been an important milestone for the sector. A collective, unified plan for the sector’s profitability, sustainability and resilience to 2030, it maps the urgent priorities that grape and wine businesses have told us they need addressed. Developed in consultation with the sector and in partnership between Wine Australia and Australian Grape & Wine (AGW), this document provides clear accountabilities for sector leadership, to be actioned with support from state and regional associations and the contributions of individual businesses.

While the domestic market remains the largest single market for Australian wine, with 40 per cent of locally produced wine sold here and a loyal consumer base, volumes are declining and at the current production levels make the sector heavily reliant on building demand internationally.

To that end, the removal of import duties on Australian wine exports to China in March provided a much-needed boost to many exporters. The value of Australian wine exports to China has since increased to $612 million in the 12 months ending 30 September. While it will take time to understand how Australian wine is being received by consumers there have been positive signs from recent in-market events such as Prowine Shanghai, the Australian Wine Roadshow and the China International Import Expo, where Australian producers and products were warmly received.

A positive return to China has more than offset softening in most export markets over the past 12 months – an outcome driven in part by changing consumer preferences, consumption occasions, and economic headwinds that impact on discretionary demand.

The grape and wine sector is not immune to global market challenges. The most pressing issue demanding immediate attention for Australia is high inventory levels coupled with declining global demand that have created a challenging market for red wine producers. Those in the warm inland regions have been particularly hard hit. A multi-faceted approach will be essential to address this imbalance throughout 2025 and beyond.

Despite the well documented global challenges, we remain optimistic and committed to expand into emerging markets and maintain market share in existing markets.

This includes identifying emerging consumer segments and building connections in markets that demonstrate medium- and long-term growth potential, whether emerging or established - as well as maintaining our strong position in the domestic market.

Investing in research and innovation to create new products and wine styles that align with evolving consumer trends will be crucial. Exploring alternative grape varieties and wine styles, particularly in lighter and lower-alcohol categories, can cater to changing consumer preferences and expand market reach.

The sector continues to embrace sustainable practices, with the voluntary Sustainable Winegrowing Australia (SWA) program increasing membership by 20 per cent in the last financial year. The program now supports over 1,450 members, with almost 900 of those certified to carry the SWA trustmark - a year on year increase of a staggering 42 per cent – demonstrating the value of sustainability to the sector and consumers. We’re committed to working with AGW and the Australian Wine Research Institute (AWRI) to ensure this program is accessible to all growers and producers.

Wine Australia will continue to empower the success of the Australian grape and wine sector across its three key functions:

• Research, Innovation and Adoption to enhance global competitiveness, helping grape and wine businesses meet the challenges of tomorrow, today.
• Market Development to increase the demand and premium paid for Australian wine across all markets by expanding market and promotion opportunities for Australian wine.
• Regulatory Services to safeguard product integrity and uphold the sector’s reputation by maintaining market confidence in the high standards expected of Australian wine.

The year 2025 presents an opportunity for the Australian wine industry to reset its course for a vibrant and sustainable future. Through innovation and diversification, embracing sustainability and strengthening industry collaboration, Australian wine can solidify its position as a global leader and ensure its continued success well into the future.”

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This article was written by Dr Martin Cole for Drinks Guide 2025, which was distributed nationwide in December and can be viewed digitally here. If you did not receive a physically copy and would like to be added to the Drinks Trade/Guide magazine mailing list, get in touch with the team now.