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July (No. 498)


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Oz vintage 2005 up 6%, NZ near record

Despite a record vintage in 2004, more than 100,000 extra tonnes of winegrapes were crushed in the recently completed 2005 vintage, with the 6% increase delivering yet another record vintage for the Australian wine industry of 1.9 million tonnes.

Speaking on the release of the WFA Vintage Report, the first quantitative measure of the 2005 vintage, WFA chief executive, Stephen Strachan, said the vintage showed strong growth in the production of white wine varieties in particular.

“Most areas enjoyed favourable seasonal conditions during both ripening and vintage, delivering quality across all our major regions,” Strachan said.

“Although record vintages for two years running could compound some of the supply challenges facing our industry at present, reassuringly, the volume of Australian wine sales has continued to grow in both the domestic and export markets. Notably, wineries have reported that supply of white varieties more closely reflects market demands than the excess supply in some red varieties.

“Grapegrowers have responded to this trend, with the white winegrape intake increasing by almost 102,000 tonnes in 2005, or by 13.5%, to 855,000 tonnes. In contrast, red winegrape intake rose by 0.5% in 2005, from 1.063 million tonnes to 1.069 million tonnes.”

The vintage report highlights the industry reaction to those sales trends, with Chardonnay grapes surpassing Cabernet Sauvignon grapes as the second-largest variety used. Intake across the five largest varieties shows that: Shiraz intake increased by 4% to over 454,000 tonnes; Chardonnay intake surged by almost 34% to 416,000 tonnes; Cabernet Sauvignon intake dropped by over 5% to just under 304,000 tonnes; Merlot intake jumped by 17% to more than 144,000 tonnes; Semillon intake dropped by over 1%, to 98,000 tonnes.

While the record 2005 vintage is expected to place further upward pressure on aggregate stock or inventory levels Strachan said the relative shift in the grape crush from red varieties to white varieties may actually help to reduce some market imbalances.

“These are challenging times for the wine industry, with growth in competition in Australia and from our global competitors, retail consolidation, discounting and the strong dollar restraining growth in winery margins. While we are selling greater volumes of wine, the value of those sales is not increasing as the industry would like it,” he said.

“These pressures, along with the excess supply of some red grape varieties, especially in some cooler climate regions, forced the lower grape prices experienced this year. That this report shows the industry is focused on going where the markets are is an encouraging sign we can move grape supply towards balance in future years.”

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