Since 2019, global wine consumption has dropped by 3.5 billion litres, to its lowest level since 1961. Unsplash

The global wine industry, like society, is increasingly a tale of two speeds. On one side, a steady decline in consumption, particularly among a generation less enthused than any in recent memory. On the other, skyrocketing prices for Burgundy, Barolo, and Bordeaux at the top end, while an ocean of unsold Australian wine sits stagnant in tank at the bottom.

We lived through globalisation; now we’re seeing early signs of deglobalisation, largely driven by geopolitics. Ask any seasoned industry figure about the current state of play and they’ll tell you, it’s never been tougher.

I attended the Wine Australia Global Market Update at the National Wine Centre in mid-July, hoping for clarity. The mood was collective, and grim. Endeavour Group (formerly Woolworths’ liquor arm) was there, joined by consultants and the Wine Australia team. The message was loud: correction is here, and it won’t be gentle.

To balance that, I sat down with David LeMire MW, co-CEO of Shaw + Smith. Shaw + Smith has become a benchmark for Australian wine, grounded, progressive, and resilient. Along with Wine Australia and the Endeavour Group they offer contrasting views on how to survive, and perhaps thrive, in what’s coming.

Since 2019, global wine consumption has dropped by 3.5 billion litres, to its lowest level since 1961. The IWSR (International Wine and Spirits Record) forecasts a further 1.5 billion litre decline by 2029, a projected 20% contraction of the global market. That’s not a blip, it’s a restructuring.

Closer to home, we’re still reeling from the China tariffs. But let’s be honest, that wasn’t just bad luck. It was years of inaction and overconfidence. The glut had already begun before the doors shut. A wall of unsold wine was already forming.

Meanwhile, fine wine has powered on, widening the gap. LeMire spoke of “reconnecting with the vineyard,” and how Shaw + Smith benefited from the psychological shift in what people are willing to pay for quality, thanks to the global pricing surge of prestige regions. With ‘Villages’ level white Burgundy now starting at AUD $220–$250, Tolpuddle Chardonnay suddenly feels like a ‘Start the car!’ moment. You can’t benefit from that price ceiling unless quality and vineyard sit firmly at the top of your priorities

Then came Trump and the threat of deglobalisation, disrupting the wine trade with erratic tariffs in early 2025. Producers worldwide were suddenly unsure if they should pivot or hold their ground. But the cracks had already appeared in less wealthy but highly educated markets.

Take Australia: affluent, globally literate in wine, and far more rational when it comes to luxury purchases than our global counterparts. Fine wine never actually transacted here like it did in the U.S. or Asia during the Covid surge. We admired it, but we didn’t open our wallets as loosely as our international friends. If anything, it left a bitter taste, the canary in the coal mine, if you will.

Geopolitical tensions and market fatigue are forcing producers to reconsider their focus and question whether the latest tariffs will undermine their success in less mature markets. Is this the early onset of deglobalisation with lasting effects, or merely a challenge navigable through a few strategic moves?

Wine Opinions has released a research paper focused on 21-39-year-old consumers of alcoholic beverages.

“While certainly not the only factor, price matters to younger consumers of alcoholic beverages,” explains John Gillespie, Founder and CEO of Wine Opinions.

“In fact, among wine drinkers who are drinking wine less frequently than they did a year or two ago, nearly half — 47% — cite the rising prices of the wines they like as a reason for drinking wine less often.”

It isn’t just price, there are other factors, including a new wave belief that consuming alcohol is unhealthy. In July 2024, a Gallup Survey revealed 45% of U.S. adults said that even 1-2 drinks per day are unhealthy, an increase of 6 percentage points from the previous year and a 17‑point rise since 2018. Among those aged 18-34, a full 65% consider moderate drinking unhealthy, compared to 39% of adults 55+.

This mindset has created a ‘sober-curious’ sensation. When I put the topic to Lemire, his response was clear and concise:

“We need to lead the conversation on wine’s place in a healthy lifestyle, open, science-based, responsible.”

With the rise, and then Covid-accelerated shift, to online socialisation, I can’t help but feel Gen Z and Millennials are forgetting the social benefits of a shared drink among friends. A moment to stop, think, talk, and clear the fog, free from the constant dopamine drip of our screens.

James Phillips, Client Solutions Director at CGA by NielsenIQ, who specialises in on-premise measurement and insights solutions to the alcohol industry in Australia and New Zealand spoke at the Wine Australia event. He highlighted the shift away from wine:

“We’ve seen other categories take market share from wine by being easier to engage with. RTDs, seltzers, cocktails on tap, they’re fast, fresh, fun. Wine needs to find a way to be part of that.”

“Younger consumers want drinks that are simple, clear, and fun. They want to know what it tastes like before they sip it. Wine doesn’t always do a good job of that.”

“There’s real opportunity in format: cans, smaller serves, pre-mixed styles. Even in categories you wouldn’t expect. Wine needs to follow suit or risk being left behind.”

It’s a tempting route. But it feels like a band-aid fix. By jumping into the flavour wars, mixing, simplifying, we enter a race to the bottom. Perhaps it keeps Riverland growers ‘busy’ but I doubt thriving. Is it a gateway to proper wine, or a dilution of the very idea of it?

My view on the low- or no-alcohol category is outstandingly positive, if, and it’s a big if, we can maintain the true character of wine. I’m not asking for terroir expression (though that would be a milestone in the evolution of the category), but at the very least, it must behave like wine.

IWSR’s Strategic Study 2024 forecasts an overall 4% growth in low- and no-alcohol beverages year-on-year through to 2028, with no-alcohol options growing at 7%, and low-alcohol essentially static. Wine Australia reports that between 2018 and 2023, no-alcohol wine consumption rose by approximately 13% annually, reaching around 4.5 million cases, while low-alcohol wine saw even sharper growth at roughly 21% per year, hitting 3.3 million cases. In contrast, traditional still wine consumption declined by about 3% annually over the same period.

LeMire’s stance wasn’t about chasing trends. It was about choosing how we position ourselves. Quality wine has never been so widespread and available, yet it still requires communication. Wine hasn’t found its next generational ambassador.

We have deeply knowledgeable sommeliers, brilliant writers, and social media-savvy influencers; however, no one has the next generation in a hypnotic state like we saw with Len Evans starting in the 1960s and Robert Parker in the 1980s. In fact, we are at pre-Len Evans consumption levels.

We have all the pillars in the industry to support such a person. Leading wineries like Shaw + Smith, alongside cult names like Giaconda, are stepping confidently onto the global stage. We have sommeliers of the highest order, a plethora of neighbourhood wine bars growing in popularity, and the general knowledge of wine industry professionals is at its highest ever.

But the audience? They can’t afford interesting wine. They can’t afford to cellar. They certainly can’t afford on-premise. I’m not saying all wine should be AUD $20. I’m saying we need wines of interest that can be cellared, all without blowing budgets.

As for the road ahead? We are experiencing what could be a momentary correction, with the very real danger of it becoming a permanent structural shift for the worse if action isn’t taken.

There are opportunities and remedies. Call me good at spending other people’s money, but Wine Australia need to focus its funding and resources on the following concerns:

1. An inevitable vine pull needs to be expedited, first and foremost, targeting regions based on quality, or lack thereof.
2. Export, with a focus on quality and rebuilding Australia’s brand.
3. Arguably the most controversial? Phenolic ripeness at lower alcohol levels. I can guarantee a winemaker just swore at me, but it is possible.
4. Avoid chasing the RTD and spirit market, concentrate on producing quality low or no alcohol wines which taste good, very good.
5. Wine Australia’s legal team must stand ready to quash any faux health claims against our blessed beverage, while their marketing arm works with health professionals to champion its benefits.

The result? A slightly higher average price per bottle, a smaller but more profitable industry, and a base to build back to where we once were.