Ninety per cent of the Australian wine industry is unprofitable and, amid cut-throat competition, things will only get worse, says Michael Palma, Director of the Australian Wine and Brandy Corporation.
Large number of vineyards with fewer than 50ha were struggling compared to those more than 150ha. "The majority of our growers really can't hang in there to ride out these tough times," he said. "It's a constant battle. There has to be another way, shape or form for them to exit the industry or to adapt. The drought has given us the opportunity to refocus our future direction as an industry ... A lot of focus has now been on trying to lift the consumer to try to look at the higher prices -- a bigger buffer when it comes to profitability."
Palma , who is also chairman of Murray Valley Wine Growers, warned that competition from Spain and Italy in the popular premium-range market was threatening local vineyards.
Palma said the wine industry had a "very short" period to ensure profitability for vineyards and wineries across the country. "I don't think any country that produces wine and supplies the export market can sit by its laurels too long," he said. "You'll get snaffled by someone else real quick."
This year's harvest is expected to be 1.35 million tonnes, which would be the smallest since 2000 and one-third less than last year's total production.
Exports remain strong, with records set for volume and value in the year ending in January. Volume grew 9 per cent to 768million litres, while value grew 2per cent to $2.85billion. The average price declined 7per cent to $3.71 a litre.
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