Australia addresses oversupply problems

At least 20% of Australia's vineyards are uneconomical and producers need to take "tough, informed decisions" if the country is to end its over-supply crisis, according to a new study.

Analysis carried out by the Winemakers Federation, Wine Grape Growers Australia and the government revealed that in over 10 regions 70% or more of production is considered unfeasible. In more than 20 regions, 50% or more of premium and popular premium grade fruit is uneconomic.
The wine surplus currently stands at 100 million cases - and is expected to double in two years.

The news comes on the back of Constellation closing its Stonehaven Winery at Padthaway this month and Foster's announcing in October the sale of eight vineyards from a number of key grapegrowing areas across South Australia.
Stephen Strachan, chief executive of the Winemakers' Federation of Australia said the initial response to the study had been "positive". "This is not about talking down our industry; it is about addressing an issue that affects us all, and which is not exclusive to Australia," he said.
In the UK Australian off-trade wine sales in the off-trade were static in the year to October 10, according to Nielsen, though the overall take-home light wine market was up 7%. Volumes were down 2%, while the market generally was up 3%.

Australia remains some distance ahead of its nearest rival in the off-trade, the USA - which saw bigger declines in value and volume terms over the same period.

Lisa McGovern director of Wine Australia said: "We remain committed to promoting both our mainstream and fine wines, and this will be supported through ongoing trade and consumer activities here in the UK.

"The global oversupply of wine is well documented, and seeing the Australian industry address these issues head-on is a significant step forward and should see Australia emerge as a stronger, more robust category in years to come."

• Wine Australia
• Sommeliers