{"id":6856,"date":"2022-12-31T12:42:14","date_gmt":"2022-12-31T07:12:14","guid":{"rendered":"https:\/\/www.indianwineacademy.com\/articles\/?p=6856"},"modified":"2022-12-31T13:06:22","modified_gmt":"2022-12-31T07:36:22","slug":"item_3_923","status":"publish","type":"post","link":"https:\/\/www.indianwineacademy.com\/articles\/item_3_923\/","title":{"rendered":"Contra Point: Australian Quagmire could be Opportunity for Indian Wine Importers"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"6856\" class=\"elementor elementor-6856\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-4720b6a elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"4720b6a\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-33 elementor-top-column elementor-element elementor-element-53f09f7\" data-id=\"53f09f7\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-70aab53 elementor-widget elementor-widget-text-editor\" data-id=\"70aab53\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.15.0 - 20-08-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Posted: Saturday, 31 December 2022 12:40<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-33 elementor-top-column elementor-element elementor-element-ad9e937\" data-id=\"ad9e937\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap\">\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-33 elementor-top-column elementor-element elementor-element-cccb2a7\" data-id=\"cccb2a7\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-1b4aea3 elementor-widget elementor-widget-text-editor\" data-id=\"1b4aea3\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<u>If you Like this article, please click\n<iframe style=\"border: none; overflow: hidden; width: 120px; height: 21px;\" src=\"https:\/\/www.facebook.com\/plugins\/like.php?app_id=173955395995712&amp;href=https%3A%2F%2Fwww.facebook.com%2Fwineguyindia&amp;send=false&amp;layout=button_count&amp;width=120&amp;show_faces=false&amp;action=like&amp;colorscheme=light&amp;font=arial&amp;height=21\" frameborder=\"0\" scrolling=\"no\"><\/iframe><\/u>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-9669605 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"9669605\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b62f3ec\" data-id=\"b62f3ec\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-c0e78f1 elementor-widget elementor-widget-text-editor\" data-id=\"c0e78f1\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"row\">\n<div class=\"col-sm-12\">\n<h1 class=\"articlepagetitle_heading\"><font color=\"#990000\">Contra Point: <\/font> Australian Quagmire could be Opportunity for Indian Wine Importers<\/h1>\n<div class=\"articlepageintroline\">Dec 31: If one goes by the observations made at WBWE Amsterdam, by Denys Hornabrook, Founder of the bulk wine exchange VINEX as a global B2B trading platform for bulk wine, to Meininger\u2019s Wine Business International in a recent interview, it offers a great opportunity for Indian businesses to import even the low-cost wines that do not fall under the purview of the Indo- Australian FTA to become operative on 31 December, 2022, opines Subhash Arora.<\/div>\n<div class=\"articledata\">\n<p>Managing  Director and Co-founder <strong>Denys Hornabrook<\/strong> launched the bulk wine exchange  VINEX in UK as a global B2B trading platform for  bulk wine in 2015, adding bottled wines to the mix in 2019. The business is  international but he was educated in Australia and worked for <u>BRL Hardy<\/u> and <u>Kingston Estate<\/u>, giving him insight into the current plight of  Australian industry in the aftermath of Chinese sanctions and unrealistic  increase in import duties on their wines.<\/p>\n<p>The mood  in Australia is currently one of despondency and frustration with many  producers in a really tough spot since they have surplus inventory and are  looking for a palatable solution.&nbsp;There\u2019s growing frustration from a lack  of perceived action by the industry body and the new federal Government. A  significant part of the industry is on its knees with crippling red wine  surpluses. Some have been forced into liquidation while others have just ceased  to exist. There is every likelihood of an economic meltdown becoming imminent,  affecting the livelihoods and mental health of families.&nbsp;<\/p>\n<p>According  to Hornabrook, 2.3 billion litres, an equivalent of 256 million 9-liter cases  of wine- more than two years of inventory, is in the tanks as Australians get  ready for the 2023 harvest. This is 25% above the industry&#8217;s 10-year  average-and without being earmarked for any market. <\/p>\n<p>Apparently,  The VINEX Southern Hemisphere price comparison index shows the weighted average  price has dropped 40% for Australia since November 2020. That&#8217;s the average of  both the white and red wines across the spectrum. Red pricing is down over 60%,  and that&#8217;s only on disclosed sales. But the price declines are on wine made  from record high industry grape prices in 2019 and 2020.&nbsp;<\/p>\n<p>One sees  countries with extra inventory participate aggressively at the World Bulk Wine  Exhibition (WBWE) held at RAI Amsterdam every year in November. However, it was  interesting to see Accolade, the mega Australian producer overtly selling bulk  wines.<\/p>\n<p>Early  Australian pioneers opened up new wine markets but most producers now wait for  subsidies to explore overseas market or expect bodies like VINEX or brokers to  bring buyers. The Export Grants program is also woefully inadequate.  Surprisingly, very few Australian producers use the advanced Closed Market from  VINEX where only invited buyers know prices.&nbsp;&nbsp;<\/p>\n<p>WBWE is an  excellent Show to promote their products but few Australian producers have  taken the initiative to re-engage UK and European Buyers Post- Covid. Part of  the reason for their lack of engagement with European buyers could be that they  don\u2019t want to face the buyers who were told over last 10 years to pay China  prices for the reds to get supply.<\/p>\n<p>Of course  the problem is not uniformly the same throughout Australia. Producers with a  diverse customer base are luckier. But a significant number of the 2,156  wineries with over 6,000 grape growers are in a world of pain or denial. It&#8217;s  worth remembering that the industry contributes significant AU$46 billion to  the Australian economy and is a top-20 export earner.&nbsp;<br>  &nbsp;<\/p>\n<p>Many  producers believe that the dialogue between Australia and China will make China  waive off the duties per the FTA that was operational. But today what happens  with China is not much relevant and no longer the solution. China\u2019s wine  consumption is at record lows and can\u2019t absorb 4 vintages of wine in tank.  Chinese demand for wine import has plummeted for wines from all countries. The  reality is that China and Russia have been two of the world\u2019s largest markets  to absorb the surplus supply. Both are now off the table, which incidentally is  not a problem for wine from Australia alone.&nbsp;<\/p>\n<p>This is a  catastrophic moment for a significant part of the Australian wine industry.  Producers are entering voluntary administration; warm climate grape growers  still have their head in the sand, spending AU$7,000\/hA or more, not realising  they will earn less than AU$3,000\/hA income in June 2023. Surprisingly, the  State agricultural authorities visit the wine regions talking about flood  relief support but no mention of the \u2018wine flood crisis\u2019.<\/p>\n<p>With  higher interest rates, lower margins and sales, we expect cash flow to become  critical resulting in possible loan payment defaults. The only reason there  hasn\u2019t yet been a financial collapse yet is because the banks haven\u2019t revalued  underlying assets of the wineries but moved on the insolvent trading &#8211; a  ticking time bomb.&nbsp;<\/p>\n<p>Hornabrook  feels if this happened in any other country there would have been widespread  protests on the inaction by industry authorities and Government. Part of the  problem is that the Australian industry is not unionised and the Government has  no motivation to financially assist and facilitate a plan to support the grape  growing and winemaking industry.&nbsp;<\/p>\n<p>Australian  wine industry needs a structural reset to survive, and prosper again. But the  grape growers and winemakers need to relentlessly lobby both the authorities  and buyers equally. Australia can\u2019t continue producing its existing level of  grapes since it no longer has the international competitive advantage it once  had. <\/p>\n<p>Quality,  diversity, organic and sustainable viticulture is the way forward, with an  increase in white wines over red wines needed. Existing 150,000 ha of vineyards  must reduce their annual yields by 25% from the record 2 million tonnes in 2021  to around 1.1 &#8211; 1.5 million tonnes.&nbsp;<\/p>\n<p>There is  an opportunity now for the Indian importers who are in a good position to  negotiate better prices, even though the low-ended wines like Accolade will not  benefit from the Indo-Australian Treaty that will come into effect on 31  December, 2022. <\/p>\n<p>According  to <a href=\"https:\/\/economictimes.indiatimes.com\/small-biz\/trade\/exports\/insights\/with-china-still-thawing-australia-looks-to-double-india-trade\/articleshow\/96442737.cms?utm_source=contentofinterest&amp;utm_medium=text&amp;utm_campaign=cppst\" target=\"_blank\" rel=\"noopener\"><font color=\"#990000\">ET<\/font><\/a>, Australia was India\u2019s biggest source of  imported wine In the 12 months through September 2022, with A$16.2 million  imports, an 81% gain on the year prior, according to government data. This was  without prices coming down. Under the current scenario, Australians are  expecting to double their exports even before the treaty comes into play. <\/p>\n<p><strong>Subhash  Arora <\/strong><\/p>\n<p><em>The  Article is based totally on the opinion expressed by Denys Hornabrook and his  views expressed to <a href=\"https:\/\/www.wine-business-international.com\/wine\/analysis\/interview-denys-hornabrook-vinex-australian-wine-crisis\" target=\"_blank\" rel=\"noopener\"><font color=\"#990000\">Meininger\u2019s Wine Business  International<\/font><\/a>. We are grateful to MWBI for letting us take the material  from the Article<\/em><strong>.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<div class=\"articledata\"><\/div>\n<\/div>\n<\/div>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Posted: Saturday, 31 December 2022 12:40 If you Like this article, please click Contra Point: Australian Quagmire could<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[82],"tags":[137,136,138],"class_list":["post-6856","post","type-post","status-publish","format-standard","hentry","category-other-headlines","tag-australian-quagmire","tag-contra-point","tag-indian-wine-importers"],"featured_image_urls":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","slider-bg":"","card-grid":"","card-list":"","morenews-featured":"","morenews-large":"","morenews-medium":""},"author_info":{"display_name":"admin","author_link":"https:\/\/www.indianwineacademy.com\/articles\/author\/admin\/"},"category_info":"<a href=\"https:\/\/www.indianwineacademy.com\/articles\/category\/other-headlines\/\" rel=\"category tag\">Other Headlines<\/a>","tag_info":"Other Headlines","comment_count":"0","_links":{"self":[{"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/posts\/6856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/comments?post=6856"}],"version-history":[{"count":7,"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/posts\/6856\/revisions"}],"predecessor-version":[{"id":6864,"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/posts\/6856\/revisions\/6864"}],"wp:attachment":[{"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/media?parent=6856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/categories?post=6856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indianwineacademy.com\/articles\/wp-json\/wp\/v2\/tags?post=6856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}