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The gripes of wrath
9 Aug 2004
Australia - and the world - has too much wine and the volume side of the business is suffering and contracting. The lower end of the market is unprofitable and the pain is likely to continue. Overplanting based on optimism about Australia's export success, as well as promotion of tax-driven vineyard schemes, means it will take 3-5 years for supply and demand to get back into balance, says wine expert Brian Croser. But he believes the situation has also provided more companies with an opportunity to become more multi-dimensional and recognise the importance of premium regional varietal wines.
Mr Croser's view is that Australia produces consistently good wines but the world's big buyers, like the US and UK, will continue to put pressure on margins and ensure small profits for companies supplying branded commodity wines. He says the big issue is whether Australia is just a supplier of commodity wines - where it is now - or whether it can build up a new image of regional quality wines which can compete with France. To do this, the Australian industry must adopt the "terroir" concept, matching wine varieties with soils, geology and climate to produce top-quality wines. This will require heavy investment, winery technology, and precise viticulture methods in a more scientific approach to wine-making, R&D and marketing.
Australian Financial Review, 7/8/04.
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