Managing Director and Winemaker Mitchell Taylor. Image courtesy Taylors Wines

Taylors Wines managing director Mitchell Taylor has voiced concerns that Australia’s red wine glut could stretch on for up to five years, resulting in ongoing price struggles for producers.

Speaking to The Australian, Taylor explained that the oversaturation in the industry made for a tough business environment.

“It is such a competitive market out there, because there is so much oversupply in the system and particularly with the way the retail market is dominated by the (retail) duopoly it makes it quite difficult to pass on a lot of our costs that are hitting the business.”

Taylor added that he did not believe that the removal of China’s tariffs would solve winemakers’ woes.

“And while we are hopeful of China opening up, there still is a five-month tariffs review in place, and it certainly will not be a ‘quick fix’ for the industry in regards to oversupply,” said Taylor.

Whilst China’s review of the tariffs is currently underway, the industry has been warned not to hold its breath that a removal of the import duties will be a heal-all salve.

As reported in the December issue of the Grapegrower & Winemaker, wine industry officials cautioned producers against perceiving the potential return of the China market as “the one solution” to the sector’s challenges.

At a briefing held in Adelaide last month, director of SA’s Department of Trade and Investment Tim White advised companies to maintain diversified export markets.

Are you a Daily Wine News subscriber? If not, click here to join our mailing list. It’s free!