“It is widely acknowledged that the Australian wine industry is enduring its toughest period in two decades,” four leading Australian wine bodies recently acknowledged in a joint statement which offered a plan of action for the embattled industry.
“Structural surpluses of grapes and wine are now so large that they are causing long-term damage to our industry by devaluing the Australian brand, entrenching discounting, undermining profitability, and hampering our ability to pursue the vision and activities set out in the Directions to 2025 industry strategy.
“Coupled with inefficient and/or inappropriate vineyard and wine operations, oversupply is amplifying and exacerbating fundamental problems in the industry, notably our decreasing cost competitiveness. As such it is compromising our ability to adopt new pricing structures and market solutions and adapt to changing market conditions.”
The statement by Winemakers’ Federation of Australia, Wine Grape Growers’ Australia, the Australian Wine and Brandy Corporation and the Grape and Wine Research and Development Corporation said that at least 20% of bearing vines in Australia are surplus to requirements and at least 17% of vineyard capacity is uneconomic.
“The industry must restructure both to reduce capacity and to change its product mix to focus on sales that earn viable margins,” the bodies proposed.“The primary focus must be on helping businesses and regions to strategically and honestly assess their current and likely future position then make appropriate decisions.”
“In particular we need to address the options for vineyards and wineries that are underperforming. Some may need to leave the industry; others may need to change what they produce and how they do it.”
The full statement can be viewed here.