A change in thinking to save winemakers going broke?
Deloitte Australia’s 2005 wine industry survey shows 40% of wineries are losing money and export prices have fallen 33% in the past four years.“Given the maturity of the industry, real structural change is needed to reverse this price slump or much of this profit erosion will be permanent,” says Deloitte business consultant Gary Doran.
With Australia still producing too much wine, producers need to start thinking “beyond the farm gate and replicate the tactics used by other fast-moving consumer goods,” he says. “This is an enormous opportunity for nimble vineyards but they must start reacting to their consumers’ needs like a good retailer.”
General manager of the Mornington Peninsula’s boutique operator Red Hill Estates (Vic) Michael Bollard, says “Far too many smaller operators don’t understand their cost base and there is no question that some players are going to go to the wall.”
FOOTNOTE: SA versus Victoria in wine clash!
While football revels in its various State of Origin competitions, Christopher Vivian, wine specialist at Sydney’s Botanical Restaurant, is thinking laterally and pitting Victoria against South Australia for the title of Best State in the Sauvignon Blanc, Chardonnay and Shiraz categories.
Matt Harrop from Shadowfax Winery in Victoria and Russell Gehling from Wirra Wirra Vineyards in South Australia will compete against each at the State of Origin wine dinner at the restaurant later this month.