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AUSTRALIA & NEW ZEALAND

Is Australia’s Wine Produktion Partially Unprofitable?
Parts of the Upper Hunter Valley can be very dry and experience drought conditions during the growing season. (© spiritsafaries.com)

AUSTRALIEN (Adelaide) – An analysis of the Australian “Vintners’ Federation of Australia” (WFA) wine association yields a result which for insiders is not surprising: Parts of the domestic wine regions are almost totally unprofitable. Among them, there are the Hunter Valley (north of Sydney) along the Hunter river, the Riverland District (north of Adelaide), and the Swan Valley along both sides of the Swan River (north-east of Perth, West Australia). The difference between the wine production in these areas compared and wine growing regions was remarkably high – over 90 percent of the productions there were unprofitable.

 

The figures mentioned by the analysis are also reflecting the difficult conditions of the vintners of other wine regions. The profiteers among the producers are those who harvest their grapes in cooler climate zones in Australia. But in the “cool climate” regions, too, up to 43 percent of the productions are loss-making, the WFA explains in the most recently published report.

“Many producers in the warmer growing zones have to cope with far higher challenges than those in the cooler areas”, Paul Evans, CEO of the WFA, says. “In the warm zones of the inland, the vintners have to make enormous efforts, yet they don’t reach the break-even-point.”

Yet, during the past years, the conditions have improved in all wine growing areas. For instance, today only 28 percent of the production at Barossa Valley are unprofitable – three years ago the ratio was 50 percent. “We have to remark positively that the grape prices have increased by 5 percent all over Australia since the past year, albeit at a low level”, Mr. Evans says.

The Australian wine nation is enormously supported by the free trade agreement, which was concluded most recently with China and other Asian countries, which Australia’s wine industry considers as a silver lining on the horizon – the hopes are large. “We have to consolidate our potential urgently. And we have to bring the discrepancy between supply and demand on a profitable level”, Mr. Evans says. “In this context the situation of the domestic wine production will also improve in the future.” (red.yoopress)

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