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Wine industry facing profit squeeze
5 Nov 2003
The wine industry has undergone difficult times over the last financial year, with wineries' profitability cut and smaller operations going out of business, according to the Australian Wine and Brandy Corporation's latest annual report. The annual return on winery assets slumped to 4.2 per cent in the 2002-2003 financial year, from 30 per cent in 2001-2002.
Australian wineries produced 1.4 million tonnes of grapes in 2002-2003. This is the first fall in production since 1997 and was mainly due to the drought.
Australians drank 420 million litres of wine in 2002-2003, up 4.7 per cent, and exports reached 508 million litres, up 22 per cent. Wine imports increased by 38 per cent in 2002-2003, mainly due to a shortage of Australian white wines.
The corporation said that even though Australia is now the world's fifth-largest wine exporter, the industry is suffering from pressures on domestic production. The strengthening $AUD could make conditions even more difficult in the next financial year.
Tradingroom.com.au, 4/11/03.
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