Wine crisis in Australia – Exports in economic freefall

“This is the worst wine crisis in decades”, those responsible in the Australian wine associations find. “Our wine industry is losing the leading role in Australia's economy”, explains Stephen Strachan, CEO of the Winemakers Federation of Australia. “We cannot simply blame the global economic crisis for this – we, ourselves, are responsible for this problem.”

Indeed: Many producers do not know how to deal with the economic crisis. Producers started their production “on tick”, they always increased their production and always relied on their wines being exported. “Our strong Australian dollar and the exchange rate are only one part – we simply have too many vintagers, who produce too much”, confirms Stephen Strachan and adds: “We had a couple of droughts in our wine-growing regions in the past decades and we thought that these climatic conditions would reduce the amount as well as the wineries in a natural way, however, more and more producers showed up and the now there is immense amounts left.”

Australia's export volume, which was 2.8 billion dollars (2.5 billion US-dollars) in 2008, is on a freefall. The dominating markets for Australian wine, like the US ( about -5 percent), Britain (about -10 percent) and the EU (about -13 percent), make the current wine crisis in “Down Under” even worse. Then, there is also the fact that even in Australia, in 2008 and then also in 2009, the sales of domestic wines had gone down considerably.

“If we do not stop our production, it will take years for us to recover from this”, says Stephen Strachan. “When we talk to producers, we recommend they strictly control their volume and produce only high quality wines, or we try to tell those that will not be able to survive in this crisis that they cannot expect things to change from one day to another.” (aw.yoopress / translator c.siegel)