Australia faces worst crisis in a decade'

Published: 23 July, 2008

Sam Tolley, chief executive of industry body the Australian Wine and Brandy Corporation (AWBC), said last week during a speech in Melbourne that there is no doubt that the wine sector is facing its toughest challenges in over a decade'.

Although many in the Australian industry have also highlighted the pressure on Australian winemakers created by the much-discussed grape glut, consolidation among retailers at home and abroad, and global oversupply, this is the first time such a senior figure at the AWBC has outlined Australia's problems so bluntly.

Tolley also added a new problem to the mix: the fallout from the recent spate of industry mega-mergers. He remained positive, however, and gave his backing to AWBC offshoot Wine Australia's new Brand Australia repositioning' launched earlier this year. The Australian wine story - despite the difficult times being experienced right now by many of the people within it - is still a great story,' he said.

Paul Henry, UK manager at Wine Australia, responded that he felt that Australia has probably seen the worst of the current downturn' and that market conditions were likely to improve over the next two years.

It's also important to remember that we will pass A$1 billion of exports to the UK in a 12-month period for the first time this year, and we have also seen exports to the US break all previous volumes. Globally, exports by volume are up 16% in the past 12 months,' he added.

Recent reports have shown, however, that the average price per litre of Australian wine during this period (July 2004 to July 2005) has fallen from A$4.35 to A$4.12.

UK research group Wine Intelligence has released a new report entitled Who Drinks Australian Wine' that focuses on the major segments of wine consumers who are not loyal to Australian wine.

This report defines several different consumer segments where Australia can grow its franchise,' said Brian Howard, report co-author.

Overall, the report shows that four out of five wine consumers now drink Australian wine, and 30% consider Australia their wine-producing country of choice. Visit www.wineintelligence.com for more details.

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