From Quantity to Quality

The long boom turns to bust

THE road from Mildura to Merbein, in north-west Victoria, is a sad sight. Many of its farms are covered with wine grapes, dying on the vines. Farmers planted the vines hoping to cash in on the seemingly endless boom in Australian wine. As with the gold rush that gripped Victoria 150 years ago, the most unlikely types expected to make a fortune. But in 2007 the boom turned to bust, forcing many farmers to walk away from grapes and land they cannot sell.

Over the past 15 years Australia's wine industry has been one of its great success stories. Export revenues last year reached A$3 billion ($2.4 billion), four times the figure from 1997. Britain, America and…