By Deborah Jackson

Tasmania has emerged as the most profitable wine region in Australia following the release of the Winemakers' Federation of Australia's 2015 Vintage Report.

The report revealed 99 per cent of grape production in Tasmania is running at a profit, down just slightly from 2014 when it was running at 100 per cent. This is in stark contrast to the rest of Australia, with 85 per cent of the country's grape production running at a loss.

The report showed an annual crush of 1.67 million tonnes, down on last year's 1.70 million tonnes estimate and 2013's high of 1.83 million tonnes.

Federation CEO, Paul Evans, said there was a five per cent increase in average wine grape prices over the past year, albeit off a low base.

"We must remember that this is an industry average and many producers in the warm inland regions in particular continue to experience enormous challenges. Our analysis shows that 92 per cent of production in warm inland areas is unprofitable," Evans said.

It revealed 94 per cent of grape production in the Hunter Valley, NSW, is making a loss; 50 per cent of the Margaret River production is suffering; while 88 per cent of production in the Murray Darling/Swan Hill region is feeling the squeeze.

According to a submission by Wine Tasmania for a Senate inquiry into the Australian Grape and Wine Industry, demand for Tasmania's premium cool climate wines currently outstrips supply, resulting in some of the highest prices in the country being achieved for Tasmania's wines and wine grapes.

This has led to significant investments in Tasmania's wine sector, with existing wine producers expanding by 20 per cent in the past five years, and many new investors entering the sector, including Brown Brothers, Treasury Wine Estates and Shaw + Smith.

The average bottle value of Tasmanian wines is $22.36, compared with the national average of $10.87 per bottle, and the value of Tasmanian wine sales is growing at almost double the Australian wine sales value.

The Tasmanian wine category represents just seven per cent of the country's total wine production, but generates 28 per cent of its total value.

Vic Patrick, chair of Wine Grape Growers Australia said: "The WFA and WGGA have asked government for $25 million over four years in supplementary government investment for Wine Australia's marketing activities. This will enable the industry to work together to boost our profile, build demand, maximise the potential of the FTAs and to restore levels of profitability throughout the supply chain.

"If these activities are not undertaken, our competitors will quickly fill the vacuum and the modest gains made in some regions over the last 12 months will be fleeting and the recovery of inland grape prices further delayed," he said. 

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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