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Australian wineries inherit a German legacy

By Jason Szep

BAROSSA VALLEY, Australia (Reuters) - In the rolling foothills of this South Australia valley, amid small flocks of sheep, drooping gum trees and century-old knotty grape vines, German traditions are prospering.

Not just in the valley's town names like Bethany and Hahndorf or streets like Siegersdorf Road, or even in a local town square named Ziegenmarkt.

The Barossa Valley has one tradition which outstrips all other lingering legacies of the first Germans who settled the region in the early 1800s: winemaking.

Australian wines have never been more popular and the Barossa is home to some 140 of Australia's top wineries, whose premium reds and whites are fast becoming vogue vintages in the demanding dining halls of New York, London and Tokyo.

Ask nearly any winemaker here about the future of Australian wines, especially overseas, and watch their eyes glow and a big smile creep across their face.

"We're lucky at the moment, Australians are regarded as being honest winemakers," said Bob McLean, managing director of St Hallet Wines in the Barossa Valley.

The Barossa, a boomerang-shaped valley 30 km (20 miles) long and eight km (five miles) wide, is the heart of Australia's wine industry, accounting for about 60 percent of exports and home to some of the world's oldest grape vines.

The valley is now savoring something as rich as the best of its vintage reds -- a surge in export volumes which has allowed even its smallest, most traditional wineries to flourish in a dire local economy.

Perry Gunner, president of the Winemakers' Federation of Australia and chief executive of Orlando Wines, said wine exports are expected to reach A$1 billion ($659 million) by the year 2000, compared to A$200 million ($132 million) in 1992.

"We're not going to get to a billion dollars any sooner mainly because we can't grow the grapes any faster," he said. "But the demand is there."

The international thirst for Australia's wines, primarily for Chardonnay, Cabernet Sauvignon and Shiraz, is strongest in Britain, where exports have grown almost 6,000 percent since 1980 to 38.2 million liters (8.4 million gallons) in 1992/93.

But Perry said demand is growing fast in the United States, Canada, New Zealand and several Scandinavian countries.

"Asia is slowly and surely, bit by bit, getting bigger, but wine is not a major part of the Asia lifestyle today," he said.

But why is Australia, which is best known as a beer-swilling culture, getting serious about wine?

"It's the generosity of sunshine," explains McLean, a burly Australian with a grizzled, grey beard and a wide smile, adding that Barossa has a Mediterranean climate which nurtures a strong fruity taste in whites while keeping reds bold.

Australia's grape vines have also largely escaped the devastating phylloxera insect, which wiped out almost all of Europe's vines in the late 1800s and is currently eating away at some of the grape vines in California.

Consequently Barossa boasts some of the world's oldest remaining vines, many of them gnarled and over 140 years old.

The combination of the historic vines, sunshine and Germanic traditions -- which have turned Riesling into a common dinner wine among many Australians -- are considered the key ingredients in Barossa's vintages.

Simon Adams, a winemaker at Samuel Smith & Son of Yalumba brand wines, said many of his techniques hark back to traditional methods such as manual old grape presses as a means of maintaining premium-quality exports.

"We're going back to some of the more traditional, hands-on techniques," Adams told Reuters at the 32 hectare (80 acre) grounds of the 144-year old Yalumba estate.

His winery also has an aging process unique to Australia -- basking Californian wood in the Australian sun for several years before shaping the pieces into new barrels to create a strong nutty taste for red wines.

The changes under way in the industry promise to make wines one of the Australia's fastest-growing exports, a fact which has become increasingly important since wine consumption in Australia has been on the decline since the late 1980s.

"There's no growth in the domestic market," said Ross Wilson, chief executive officer of S.A. Brewing Holdings, the country's biggest wine producer with brands like Penfolds Wines and Lindemans.

Wilson also cautioned that the price of Australian grapes could rise as demand increased and grape growers become more of an organized force in the industry, possibly forcing up the price of Australian wines abroad.

But most agree the wine industry has been a success story, turning a home-grown commodity into a premium export.

"The wine industry has done what people say should be done in the rest of Australia," said Rob O'Callaghan, who owns Rockford Wines in the Barossa. "They've created value-added exports."

(Article is no longer on reuters.com)