By Amy Looker
Four peak wine industry bodies have called for a strategic overhaul of the Australian wine industry in a bid to combat oversupply, which could see many small wineries and growers forced out of existence.
In a joint statement, the Winemakers’ Federation of Australia (WFA), the Wine Grape Growers’ Australia (WGGA), the Australian Wine and Brandy Corporation (AWBC) and the Grape and Wine Research and Development Corporation (GWRDC) outlined the realities of Australia’s current state of oversupply, describing the current situation as the worst in 20 years and stating that the surplus of grapes is causing long-term damage to the wine industry by devaluing the Australian brand.
The statement suggests a raft of initiatives as part of a Wine Restructuring Action Agenda (WRAA) that will see the industry bodies liaising with Federal Government to address its concerns relating to the Wine Equalisation Tax (WET) rebate that allow uneconomic wineries to stay in business and therefore contribute to oversupply.
“The primary focus must be on helping businesses and regions to strategically and honestly assess their current and likely future position then make appropriate decisions,” the statement said. “In particular we need to address the options for vineyards and wineries that are underperforming. Some may need to leave the industry; others may need to change what they produce and how they do it.”
The WRAA also plots a timeline of steps that it plans to implement as early as this month that will see the roll-out of confidential supply data summaries to regional associations, updated software packages made available to wineries to assess their performance and viability and regional briefings to be held in 14 regional centres to discuss local data and issues.
The WFA and WGGA will also engage the government in discussions about improved exit packages for growers and small wineries seeking to leave the industry.
The report concludes by stating: “Oversupply is having a debilitating impact on Australian wine businesses and restructuring the supply base is both essential and inevitable. Our objectives in releasing this statement and formulating an action agenda are to advance the adjustment process, to bring about more sustainable operating conditions as soon as possible, and to dispel any notion that the industry can trade its way out of its current problem or rely on the government to step in.”