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Delhi Wine Club

Posted: Saturday, January 16 2010. 10:06

Casella Calls for Culling Vineyards

The Maharashtra farmers do not face this situation today but it might be relevant for them to understand the implication of John Casella, owner of the company that owns Yellow Tail, the biggest selling Aussie brand in the US agreeing that thousands of acres of vines need to be ripped out because of the continuing grape glut in Australia.

John Casella, MD and the patriarch figure of Griffith-based wine company Casella Wines says there is no painless way to end the grape glut that has led to plummeting prices and profit margins of the Australian wine industry. ‘Some growers just will have to remove vineyards. Whether that's individual growers or portions of their vineyards, it's up to the industry to decide,'' he said.

Doug Lehmann, MD of  Peter Lehmann Wines had reportedly warned last week that 35,000 hectares of vineyards needed to be removed to correct the huge imbalance between supply and demand.

A recent wine industry report said Australia was producing 20-40 million more cases than it was selling every year. This equals from 270,000 to500,000 tons of excess grapes, or 20,000 to 40,000 hectares of surplus vines.

Casella said there was about a 20 per cent gap between the amount of wine produced and total sales and the situation could not continue, according to the report .''We all are working as hard as we can to build markets, but we can't be reforming the Australian wine industry at the present time, '' said he reportedly.

Yellow Tail wine is the world's fourth-biggest wine brand and the No. 1 imported wine in the US. It is the biggest Australian wine brand in more than 10 countries and sold in 40 export markets. Last year the company's sales climbed to A $427 million.

The Maharashtra farmers have had a crisis year in 2009 and 2010 may not be much better because the wine producers are being conservative in buying grapes. The former number one producer Indage Vintner had a meteor crash from which it is struggling to recover. Although there is talk of its streamlining its house and even th4e possibility of coming back to the national market from April 2010, clearly the worst is not over yet.

But whether it is through the Indian National Grape Board or any other quasi government agency, the farmers might expect some help but must have realized that all is not always honky dory with growing Cabernet Sauvignon and Shiraz.


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