Sinking Ship...

The Australian Wine Industry?

Confirmation that the Australian wine industry is in trouble it seems. Their recent Wine Industry Outlook Conference has called for a 60% reduction in wine producers and a 20% reduction in overall wine produced within the next 10 years. The current estimated surplus of grapes this year is projected to be a massive 680,000 tonnes. They also suggest that, with 90% of wineries not making money, wineries with less than 80 hectares of vineyards or turnovers of less than $5 million will be forced to close or joint-venture with other wineries to survive. Scary. Amazing. Read more of the article here.

Today in NZ, Wine Industry big chief Phillip Gregan has seized upon this to issue a warning for our own industry. He suggests the lessons to be learned are as follows;

1. Don't get ahead of the market. Clearly that in Australia vineyard planting has got ahead of market demand.

2.Don’t harvest more grapes as an industry than you need – it depresses wine prices and winery profitability and hence the ability to invest in marketing = long term negative consequences for all industry participants.

3. Wineries and growers must talk to each other. Contracts are crucial.

4. Quality, not quantity. That is the foundation on which the industry is based and is the only path to a prosperous and profitable future for growers and wineries.

5. Dont believe too much of our own press. The industry has been very successful but it has been achieved through a lot of hard work, a big investment of capital, a good shot of innovation and more than a drop or two of luck. Dont get complacent.

Sound advice we are all well aware of. Hard to believe we could turn out like the Australians, given they are largely based around export of lower priced large volume wines, the complete opposite of NZ. Although, despite our good name abroad, where will we be if the world stops drinking our Sauvignon Blanc ? Its 50% of our national vineyard - are we the only country with a statistic like that ?