HUNTER VALLEY, Australia — The hills are lush and green, the grapes plump and ripe. But one bite of this famed valley’s most prized product reveals a winemaker’s worst nightmare.
“It’s like licking an ashtray,” said Iain Riggs, a vintner here. “It’s really rank and bitter.”
The bush fires that raged for eight months in southeastern Australia inflicted widespread damage on the vineyards of the Hunter Valley, not directly from flames, but through the invisible taint of smoke.
Winemakers like Mr. Riggs have abandoned hopes for some 2020 vintages. Grapes that were closest to the fires are being left on the vine. Those farther away are being tested for smoke contamination, though it is an inexact science, and in some cases producers won’t know whether a wine can be sold until it has fermented in tanks.
Millions of dollars, and the good names of venerable wineries, are on the line.
“You can’t put out a bad product,” said Chris Tyrell, a fifth-generation winemaker in the valley. “Your reputation, that’s all you’ve got, and we’re not willing to risk it.”
The Hunter Valley, north of Sydney, is synonymous with wine, which has been produced there for nearly 200 years, beginning in the early decades after the British established a penal colony in New South Wales. Today, the region, which is best known for its sémillon and shiraz varietals, is home to more than 150 wineries.
The valley is a crucial part of an Australian wine industry that has become the fourth largest exporter of wine by value in the world, after exploding onto the international scene in the 1990s.
It contributes hundreds of millions of dollars a year to the country’s economy, not only through domestic and international sales, but also through tourism — another part of the wine business that was hurt by the fires, as vacationers evacuated areas near wine country or abandoned plans to take to the road for tastings.
Even before the blazes, the wineries of the Hunter Valley had contended with years of drought. Now, after a record-dry 2019 helped produce bush fires larger than any the country had ever seen, winemakers are suffering a double blow to production.
Nationwide, the industry is expecting losses in sales of about $110 million, or 170 million Australian dollars.
On the surface, many wineries appear unharmed. At the Tyrell winery, rich green orchards surround the simple shed that Mr. Tyrell’s ancestor Edward Tyrell constructed after arriving from England in the mid-1800s. But 80 percent of the grapes cannot be used, and the financial loss amounts to about $5 million, or 7 million Australian dollars, Mr. Tyrell said.
The winery must err on the side of discarding any fruit that might be tainted, he said. “To have 60 families that work for us and a very old name, we’ve been here too long and done too much hard work” to take any chances, he added.
Down the road at Brokenwood Wines, where Mr. Riggs is the chief winemaker, the smell of crushed grapes and fermented alcohol seeps from empty crates and tanks that are normally bursting with fruit that produces the vineyard’s shiraz, chardonnay and sémillon blends.
The winemakers there have become chemists as they try to determine which grapes can be salvaged. Labeled glass beakers cover desks and shelves in the main office, and sheets with lists of numbers and ingredients are entered into computers.
Testing grape sugars for compounds confirming smoke taint is a tricky business. Mr. Riggs calls it the “dark arts”; even with all the numbers in front of him, it’s a guessing game.
The grapes themselves “look terrific,” he said, and “that’s why it’s so insidious.”
Stuart Hordern, the senior winemaker at Brokenwood, said the winery would be able to procure some fruit from vineyards farther away, or sell some of its reserve wines. But it has had to turn away some normal suppliers because of the risk of smoke contamination.
“They’re tough conversations to have, but it’s important to be honest at the end of the day,” he said. “Where we can we’ll take in their fruit, because we want them to be there next year.”
As economically damaging as the fires may be, the winemakers of the Hunter Valley are acutely aware that the losses could have been far greater than one year’s vintages. Vineyards in the Adelaide Hills in South Australia and along the southeastern hinterlands of the state of Victoria went up in flames.
Charles Rosback, the owner of a winery in the Adelaide Hills, lost almost 40 acres to a blaze that tore through his property on Dec. 20, taking most of his orchards with it.
“Luckily, my house didn’t burn down,” he said. “The fire got so close to the house that the paint on the walls blistered. The water tanks burned down; I’m quite surprised it survived.”
Winemakers have limited ways to insulate themselves financially from a calamity like a fire. The price of insuring orchards is prohibitive, they say.
“The cost of the premium is about a third of the value of the crop each year,” said Rob Hawkings of Beechworth Wineries in Victoria, whose vineyards were spared by the fires. “So if you took insurance, we’d be bankrupt by now.”
The irony, winemakers note, is that had the grapes been harvested and stored in a warehouse that burned down in the fires, they would have been insured for that and compensated.
The wine producers are keenly watching legal battles across the Pacific that in some ways echo their own plight. California winegrowers have gone to court with their insurers, seeking damages for smoke taint after the wildfires of 2017. They, too, did not have coverage for grapes still on the vine, but they say the taint was revealed during the production process.
“If they have success, there will be some excitement,” Mr. Riggs said.
Some state governments in Australia are giving grants to help winemakers determine smoke levels in their grapes, but are stopping short of compensating them for their losses. Private organizations have launched public appeals for donations to help winegrowers recover.
The industry has also started campaigns urging Australians to visit their local wineries, buy Australian wine or plan to return to wine regions for their next vacation.
For people like Mr. Hawkings, the coming Easter holiday break will be the next major test. Even with the upheaval from the fires, he remains grateful that nothing worse happened to his operation.
“I’m standing here, looking at green grass, I’m looking at vines that are healthy,” Mr. Hawkings said. “We will have a crop next year. If the fires had come through, we’d have lost the crop and the ability to move forward.”