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Reduced harvests on horizon in Australia

Published:  23 July, 2008

Australia's Wine and Brandy Corporation is predicting reduced wine grape harvests for the next five years.

As such, growers should shift from volume to value, according to the company Chief Executive Sam Tolley.

He said this would justify price increases in wines that were available. He suggested growers needed to offer products that could command higher prices.

"If there is to be (a) rise in price it still needs to be justified," he said.

The Corporation estimates a 1.47m tonnes 2007 grape harvest and expects this to fall to 1.22m in 2008 and 1.16m tonnes the year after.

Despite the harvest fallback, volume demand has continued to rise, up domestically by 3.9% in 2006-07, compared to 2005-06. Export volumes rose by 8.5% over the same period, sustained by drawing from surplus stock.

"Two successive drought-affected seasons, and the likelihood of a further reduced 2009 vintage will constrain the wine that is available for export," said Tolley.

In the short term, the Australian Wine and Brandy Corporation predicted that regional winemakers would partially bridge the supply gap by raising domestic cask imports and draw down stocks "to less-than-desirable levels".

However, the Corporation predicted that reduced supply would result in an increase in Australian grape prices.