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Red wine glut hurts producer profits
11 Apr 2005
The oversupply of grapes is eroding revenues and profits on some segments of the value chain in the wine industry. Wine grape growers produced about 1.9 million tonnes of grapes last year, and the Australian Bureau of Agricultural and Resource Economics expects about the same production this year. The Australian Wine and Brandy Corporation predicted Australia's oversupply of some grape varieties would continue for another two years, but that wine stocks would be short of demand from 2007. Now the glut of red wine grapes has forced McGuigan Simeon to reduce profit forecasts. The company said that if trading conditions do not improve significantly in the next 24 months, there was a strong chance growers would pull out vines, something not experienced for 20 years.
The Australian, 09/04/05
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