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Adapt or 'get out' key message of Some Like It Hot Seminar
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The engine room of the Australian wine industry was given a sobering insight into its future at the Some Like It Hot Seminar at the Chaffey Theatre in Renmark on Thursday.
Members of the Riverland wine industry heard that quality over quantity was the key to long term viability.
They were also told that early indications were that the 2010 vintage would be tougher than next year's.
Almost 150 people attended the day-long event and heard from speakers including:
* Australian Wine and Brandy Corporation's statistical expert Lawrie Stanford * Constellation Wines technical operations manager Peter Dawson * Adelaide University's water scientist Professor Mike Young * Kim Chalmers, whose family business is pioneering new varieties that thrive in warmer climates like the Riverland.
Other guests spoke on carbon emissions, more efficient use of drip irrigation and how a local family was managing the challenges of drought.
Some Like It Hot chairman Warwick Billings said the amount of information provided during the seminar would assist the decision-making at all levels of the industry.
"The frankness of our speakers appeared to be appreciated by the audience," he said.
"There is massive uncertainty within the industry, but I am sure many Riverlanders went home better informed on several key issues like pricing, varietal demand and water availability.
"It was one of our best seminars and it was a credit to the local industry that so many turned up.
"I think one of the key messages was that for those growers who are committed to the long term and who are willing to adapt, there are a number of opportunities worth considering."
Some key messages from speakers were:
* Constellation confirmed that it would be reducing its intake from the Riverland and Sunraysia by 25% (75,000 tonnes) over the next three years. * Victoria and South Australia will be the two biggest customers in the temporary water market this summer. * Riverlanders have enough water or access to water to produce another large crop in 2009. * Growers who compensate for lower prices by producing more tones may struggle to sell all their grapes. * There needs to be a far more reliable yield assessment mechanism put in place across the industry. * The Federal Government must remove the capital gains tax on their industry exit grants to increase the take up rate. * The case for downsizing the Australian wine industry was becoming more compelling. * The profitability of producing wines at the low price end of the market was disappearing fast due to over supply, drought related cost increases, exchange rates and increased import tariffs in key markets like the UK. * Winegrape prices in the Riverland are almost certain to be lower this year. * The Australian industry is positioning itself to trade up the price chain. It was suggested that the world is saturated with cheap and cheerful Australian wines, but in key markets like the UK, the profit margins in bottles of wine sold for 3 to 4 pounds were being squeezed beyond the point of viability. * New varieties that thrive in drought and extreme temperatures are gaining acceptance with consumers looking from something other than Shiraz, Cab Sav or Chardonnay. Some already being trialed in the Riverland are Vermentino, Fiano, Sagrantino and Tempanillo. It was suggested that Australia was well placed to pioneer this new varietal wave. * Until the recent global financial crisis hit, consumers were trading up the price chain. Early indications are that may be reversed in the months ahead. * The restructuring of managing water resources within the Murray Darling Basin is taking too long. * The amount of run-off into the Murray at the top end of its catchment area could be significantly reduced if forestry expansions continue. It is estimated that for each hectare of forestry planted, 2.5 megalitres of run off will not reach the River system each year. * The River Murray will have to downsize and disconnect a number of wetlands and lakes to survive.
Billings said that the Some Like It Hot Seminar was designed to give the Riverland wine industry a chance to focus on the future and the challenges it will face.