Australia’s wine harvest fell to its lowest level in more than 25 years

Australia’s wine grape harvest fell to its lowest level in more than 25 years in 2026, as weaker global demand and a prolonged oversupply of red wine pushed the industry into a sharper contraction, according to Wine Australia’s annual National Vintage Report.

The report put the national crush at 1.27 million tonnes, the smallest since 2000 and 25% below the 10-year average. Wine Australia said that drop will translate into about 33 million fewer 9-liter cases of wine produced this year.

Sandy Hathaway, Wine Australia’s senior analyst for market insights, said the smaller harvest reflects a broad decline in wine consumption around the world as well as Australia’s continuing red wine surplus. She said weather events including flooding in Mildura, frost and a late vintage also reduced output, but market conditions appear to have been the main force behind the decline.

“The crush is definitely down,” Hathaway told ABC News. “It’s well down at 1.27 million tonnes, which is the smallest since the year 2000.”

The downturn was steeper for red grapes than for white grapes. Red grape production fell 29% from a year earlier, while white grapes declined 9%. For only the second time in the past 12 years, white varieties made up the majority of the national crush.

The shift also changed the ranking of Australia’s leading grape varieties. Chardonnay overtook shiraz as the country’s top variety by crush volume this year. Hathaway said it was the first time in 20 years that shiraz accounted for less than 20% of the crush, a sign of how sharply demand has changed within the market.

Wine Australia said grower income this year was down 26%, adding pressure on vineyard businesses and regional communities that depend on grape growing and winemaking. Hathaway said some producers had hoped for a smaller harvest because lower output may help bring supply more in line with weaker demand, even if it means less money flowing through wine regions in the short term.

That adjustment is already visible in major growing areas. In McLaren Vale in South Australia, vineyard contractor Clint Ledgard told ABC that requests to remove vines have accelerated as growers lose confidence in future sales. He said he used to receive calls every few weeks from growers wanting vineyards ripped out, but recently had been getting calls every day.

Ledgard said many growers no longer want to keep spending on grapes without knowing whether they will be able to sell next year’s crop. Some are considering switching land to pomegranates, grain, olives or hemp, while others may sell parcels for housing or lifestyle development.

His comments point to a broader restructuring that could affect more than vineyard owners. A smaller grape supply and reduced wine output can force wineries, distributors and other beverage businesses to rethink purchasing plans, contracts and pricing at a time when global alcohol consumption is under pressure. In some regions, that may also reshape local employment and investment tied to wine production.

In the Riverland, grower Mintu Brar said conditions have become harder each year, though he remains hopeful that demand will recover. He called for more government support to help producers manage through the downturn, including possible loan relief over several years while the market stabilizes.

Brar told ABC that many growers are asking why more direct assistance has not been offered to wine producers facing prolonged financial strain. He said temporary support could help preserve businesses until conditions improve.

Even with the weak national figures, some premium regions showed more resilience. In Coonawarra, one of Australia’s best-known cool-climate regions, crush volumes fell just 0.5%, compared with declines of more than 20% across most cold-climate areas.

Luke Tocaciu, owner and winemaker at Patrick of Coonawarra, said demand for premium cabernet sauvignon has held up better than much of the broader market. He said export interest in cabernet sauvignon has been encouraging for the region, even though average purchase values have eased.

Tocaciu said he remains optimistic about areas with strong water security, consistent quality and established international reputations, but he also said the wider industry still faces a major restructuring.

The latest figures underline how deeply Australian wine producers are being affected by changing consumer habits abroad and by a domestic supply base built for stronger demand than today’s market can absorb. For growers across red-wine regions especially, the result is lower income, fewer grapes going to crush and increasing pressure to decide whether vineyards remain viable at all.