NO PLACE FOR COMPLACENCY IN AUSTRALIA

Published: 23 July, 2008

By Jo Burzynska

Australia is on course to hit its ambitious sales targets, but must not be complacent in the face of imminent global recession, increased competition and potential oversupply. This was the general thrust of last month's Australian Wine Marketing Conference in Adelaide. The first Wine Marketing Conference, in November 2000, set out the industry's Marketing Decade plans to almost double wine sales to A$5 billion in ten years. In a progress report on the first year, Paul van der Lee, of van der Lee associates, said that sales targets had been exceeded by 15 million litres. "Sales growth targets of 41 million litres in 2002, and 56 million litres in 2003 require a growth rate of 13.5% compound. We're currently doing 18%," he said. Despite meeting this year's target, there is still a surplus of 25 million litres in 2001 to be taken care of by bulk exports. With a record crush of 1,426 million tonnes in 2001, up 25% on 2000, and more vineyard plantings than had originally been estimated, van der Lee admitted that grape supply pressure was building: "The rate of growth is slowing and supply is increasing, so our targets for the future do look more daunting. Our competitors are definitely strengthening and our market access and promotion is still too low." Australian wine's huge growth in the last decade has been narrowly based, with almost 50% seen on the UK market. Van der Lee calculated that 66% of the growth prospects for Australian wine now lies in non-category markets where Australia is less established, such as the USA and Germany.

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