About 20% of the country's vineyard area is not profitable, says a report, released to producers this week. The 'Wine Restructuring Action Agenda', as the report is named, has been compiled by the Winemakers' Federation of Australia, the Australian Wine and Brandy Corporation, Wine Grape Growers Australia and the Grape and Wine Research and Development Corporation.
"Oversupply is having a debilitating impact on Australian wine businesses and restructuring the supply base is both essential and inevitable," said the groups in a joint statement on the report.
Industry leaders, including Australian Vintage and members of the Australian Wine & Brandy Corporation, have warned for more than a year that Australia cannot sustain current production levels. Action must begin immediately to address the problem, says this report.
"Bailouts are not an option and neither governments nor industry bodies should be expected to provide the answers; tough, informed decisions must be made by individual growers and wineries, from as early as the 2010 vintage."
Australia's wine exports have fallen by 8m cases and 21% in value since their peak in October 2007, according to the report in Drinks Business.
Among the action points put forward is a plan to refocus marketing on emerging markets in Asia (especially China and perhaps India) and consider more attractive exit packages for unprofitable grape growers.
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