Australian Winemaking Tradition Bears Fruit : Viticulture: Experts say wine exports will reach the same levels as wool, coal and wheat before decade’s end.

Not so long ago, Australia’s wine industry seemed a bit of a joke. Isn’t this the country, after all, that invented the one-gallon cardboard “wine cask”?

Demand drooped with reputation. As recently as 1989, grape growers were pulling out vines for more profitable crops.

Now, Australia’s vintners are headed for a select club. Their products score well at such blind tastings as the annual International Wine Challenge organized by Britain’s Wine magazine.

And by the turn of the century--some analysts say sooner--Australia’s wine exports are expected to top $740 million. That would put wine in the same league as the country’s traditional export mainstays of coal, wheat and wool.

Europe remains Australia’s biggest overseas market, with exports last year rising by 3 million gallons, or 20.8%. Australia’s best customer is Britain, followed by the United States, Canada and Sweden.

Australian wines haven’t yet penetrated Asian markets to any large extent. In Japan, Australia’s lack of cachet has meant that its share of the market has actually declined--from between 3% and 4% a decade ago to about 2% now. But several wine companies are planning to make up for that by targeting the Chinese market.

To be sure, Australia has a long way to go before it catches up with France, even on a quantitative basis. French vintages account for 35% of world wine sales and Australian a mere 2.5%, according to the Winemakers’ Federation of Australia.

Nor is wine ever likely to displace beer in the hearts, or stomachs, of Australians. They still drink between five and six times as much of the more macho beverage despite a 150-year-old winemaking tradition.

But a sunny climate and ample water--not to mention aggressive marketing, which stresses the absence of chemical contamination--have made the country a presence in medium-priced table wines.

In 1993, Australia exported a record 32.8 million gallons of wine, valued at $254.4 million, according to government figures. If this 32% jump in value over 1992 can be maintained, the $740 million mark will be passed by 1997.

The Australian Wine Export Council predicts an increase of at least 30% in value for this year’s exports. “The world wine community is becoming aware and confident that Australian wine is, in fact, a world-class, quality product,” said Ian Sutton, the council’s chief executive.

And investors have reached similar conclusions. A wine index maintained by brokerage William Noall, tracking nine of the 10 specialist wine companies listed on the Australian Stock Exchange, climbed 61% from June 1 to Sept. 16, compared with a rise of just 17% in the benchmark All Ordinaries index.

A longer-term comparison is equally dramatic. From July, 1993, to last July, the wine index rose 49.7%, while the All Ordinaries managed 13.3%.

“We have seen an incredible surge in the wine sector,” said George Polites, author of Noall’s wine report. “I wouldn’t expect that rate of growth to continue, but I certainly expect the sector will outperform the All Ordinaries for some years to come.”

Polites nominated Mildara Blass Ltd. as Australia’s premier wine company. Mildara earlier this month reported a 38% leap in after-tax profit. The company, which concentrates on premium wines in the $5.92 to $8.88 price range, posted profit of $13.2 million for the year to June 30 after sales revenue increased 11% to $93.5 million.

Ray King, Mildara’s chief executive, said export sales have continued their steady growth of the past three years and now account for 30% of Mildara’s volume.

King said he expects the company’s traditional markets in Britain and the United States will be enhanced by new ones in continental Europe. “I’m absolutely delighted with the progress of our developing markets in Switzerland, Germany and Holland,” he told investors.

In a report earlier this year, Hambros Equities said Mildara has a distinct advantage over some other wine companies in that it has secured a future grape supply, allowing the company to increase supply 60% by 2000.