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2015 Vintage Report shows signs of opportunity, says WFA
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The Winemakers’ Federation of Australia (WFA) released their annual Vintage Report last week with figures showing a 2015 Vintage crush of 1.67 million tonne with some modest and patchy strengthening in average winegrape prices and exports.
The red crush marginally beat out the white on tonnage, with 835, 523 tonnes compared to 834,041. Shiraz (391,649), Cabernet Sauvignon (209,588) and Merlot (107,280) were the top three red varieties while Chardonnay (376,339), Sauvignon Blanc (89,125) and Semillon (66,572) led the way for whites.
South Australia produced almost half of the entire vintage with 716,592 tonnes, followed by Murray Darling-Swan Hill with 381,732, NSW with 332,092, Victoria with 60,258, Western Australia with 30,069, Tasmania with 7,197, Queensland with 610 and ACT with 21 tonnes.
Paul Evans, WFA chief executive, said the 2015 Vintage Report reveals a winegrape crush marginally lower than the seven-year average and slightly down on last year’s 1.70 million tonne estimate and 2013’s high of 1.83 million tonnes.
“We see a five per cent increase in average wine grape prices over the past year, albeit off a low base,” Evans said. “We must also remember that this is an industry average and many producers in the warm inland regions in particular continue to experience enormous challenges.”
Evans said the Federation’s analysis shows that 92 per cent of production in warm inland areas is unprofitable.
“The macro-economic climate has shifted in our favour in regards to more favourable exchange rates, the signing of important Free Trade Agreements in the Asian marketplace and improved consumer sentiment in our traditional markets,” he said. “But we must remain pro-active. While these developments will help, they will not be enough to restore lost margin and share across the industry over the longer term unless we work with government to make the most of the opportunity.
Evans said the wine industry must urgently seize the potential to grow demand for Australian wine and help address the on-going structural mismatch between supply and demand at profitable price points.
“Until this happens we are likely to see poor levels of average profitability continue for both grape growers and winemakers,” he said.
“Specifically, we need the resources and promotional activities to restore sustained global consumer interest in Australian wine and to capitalize on the macro-economic shifts that have moved recently in our favour. Adequate funding for the global marketing of our wines is critical if we are to compete with heavily subsidized Old World producers and lower cost New World producers.”
Vic Patrick, Wine Grape Growers Australia (WGGA) chair said, the organisation was committed to quality and value and consistency remains.
“What we need now is the ability to remind the global consumer of our offering in a very crowded and highly competitive marketplace,” he said.
The WFA and WGGA have asked government for $25 million over four years in supplementary government investment for Wine Australia’s marketing activities, which Patrick said would enable the industry to work together to boost our profile, build demand, maximise the potential of the FTAs and to restore levels of profitability throughout the supply chain.
“If these activities are not undertaken, our competitors will quickly fill the vacuum and the modest gains made in some regions over the last 12 months will be fleeting and the recovery of inland grape prices further delayed,” Patrick said.