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Wine industry raises a glass to rosy future
Article credit/source – https://www.abc.net.au/news/rural/2017-06-07/australian-winery-owners-smiling-as-expert-markets-strengthen/8596984
Australian winery owners smiling as export markets strengthen, prices rise
Optimism in the Australian wine industry is booming with prices up and vineyards sitting stale on the market being snatched up.
According to figures from Wine Australia, China remains our biggest export market and recorded the largest growth in the last year.
But there were also lifts in exports to the US, including a 10 per cent increase in the average value of white wine and volumes being sent into the country.
Wines of WA chief executive Larry Jorgensen said that went against the status quo of the last five to 10 years.
He said this was, in part, due to the lower Australian dollar against the US dollar, but it also reflected a change in attitudes of international consumers.
“We are really starting to see the price segments above $10 a litre grow and that is quite a significant change over previous years,” Mr Jorgensen said.
“That’s good because WA did have a good market [in the US] pre-global financial crisis, and it could be that Australia fell out of favour to some extent or at least, became perceived as a good source of lower value, affordable wine.”
Mr Jorgensen said previously the US tended to buy Australian wine valued at $5 to $7.50 a litre.
In vineyards, the strengthening export market is putting smiles on the faces of winery owners.
Willow Bridge Estate owner Jeff Dewar said compared to 2012, the industry was “extremely positive”.
“We first got into the industry in the 1990s and planted in the early 2000s and we went through a huge glut,” he said.
“So it’s a huge improvement in regards to optimism and the confidence behind the brand.
“From a Willow Bridge point of view, we’ve actually established a new distributor — both in the UK and the US — over the last 18 months and I think that’s a pretty good sign that Australia is back on the radar.”
He said he was hoping the renewed interest would give Australia an opportunity to once more rebrand themselves as a premium market.
“What you need to be doing is getting a foothold with those brands, and make sure that the brand is strong enough to actually get through [a change in the Australian dollar],” he said.
More vineyards being sold
While the optimism is largely among those who sell their wine internationally, there are indications its having a flow-on affect to the industry as a whole.
Acton South West director Brian Moulton, whose real estate business specialises in winery and vineyard sales in the south-west of Western Australia, said within the space of two months he had sold four wineries that had been sitting on the market for up for four years.
“There’s never as many vineyards for sale as people are led to believe, however the last three or four years they have been very slow to sell,” he said.
Mr Moulton agreed the increase in sales was likely driven by export markets but said he also believed continuity of supply was behind some of the purchases.
“Some of the bigger operators have been able to buy fruit on the spot market and have been able to pick and choose,” he said.
“But in recent times, with demand increasing and sales increases, I think these people are worried about contractually having fruit to make into wine.
“The prices for bulk buying in recent years … Chardonnay was only $800 to $1,200 tonne but this year it’s hit $3,000 a tonne, so that indicates that there is a demand.
“And I believe these vineyard sales are people wanting to secure fruit for the future.”
Originally published on – 07 Jun, 2017 By Tyne Logan