Winery numbers show a steady drop

17 Mar, 2016 02:00 AM
WINE DECLINE: According to the latest Australian and New Zealand Wine Industry Directory (WID), the number of wineries in Australia has dropped for the second consecutive year.
WINE DECLINE: According to the latest Australian and New Zealand Wine Industry Directory (WID), the number of wineries in Australia has dropped for the second consecutive year.

THE number of Australian wineries is falling.

The figure comes despite exports enjoying a healthy rise and forecasts for further growth in coming years.

According to the latest annual Australian and New Zealand Wine Industry Directory (WID) released last week, the number of wine producers decreased for the second consecutive year to 2468 in 2016, down by 13 since 2015.

This is 105 fewer than the all‐time peak of 2573 in 2014.

The directory, now in its 34th edition, has listed Australian wine companies that commercially sell wine every year since 1983.

Directory editor Elizabeth Bouzoudis said the number of wine producers was on a downward trend after three decades of booming growth, although winegrape intake increased marginally to 1,669,564 tonnes.

"We have to go back to 1987 to find the last time the number of wineries decreased for two consecutive years," she said.

"We are seeing now the results of low profitability across the industry, and we believe there will be more exits from the list over the next year through closures and mergers."

The change in the number of wine producers was uneven around the country.

Numbers increased slightly in South Australia, Victoria and Tasmania, but were lower in other states and territories, with Queensland down from 85 to 79, WA down from 366 to 358 and NSW/ACT down from 469 to 463.

The WID said winemakers had responded to calls from industry bodies in recent years to reduce production, causing many grapegrowers to leave the industry.

This is reflected in the total area of Australia’s vineyards continuing to decline in 2014‐15.

Australian Bureau of Statistics show total vineyard area (including not‐yet‐bearing areas) decreased by 9 per cent from 148,507ha in the previous survey in 2011‐12 to 135,178ha in 2014‐15.

Vineyard area has now declined by 22pc from the record level of 2006‐07, and is lower than any time since 1999, the WID reported.

Producers advised they used 155 varieties to produce straight varietal or blended wines, including new varieties introduced which has become a trend of recent years.

Although winery numbers have declined, the forecast for exports is in healthy territory.

More than 60pc of Australia’s annual wine production is exported.

The recent Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Outlook 2016 agricultural commodities report documented that in 2014–15 the value of wine exports rose by 7pc to just under $2 billion.

This is the first year-on-year increase since 2006–07.

"Driving this increase was a 4pc rise in wine export shipments, to almost 745 million litres, and a 3pc increase in average unit export value," ABARES reported.

"The increase in export shipments largely reflected growth in consumer demand in Asian markets, particularly China and Hong Kong.

"Australia’s major export destinations for wine include Canada, China, Hong Kong, New Zealand, the United Kingdom and the United States.

"In 2014–15 these six markets accounted for around three-quarters of Australia’s wine exports, in both value and volume terms.

"The two largest markets, the United States and the United Kingdom, together accounted for 57pc of total export volume and 42pc of export value."

ABARES predicted the value of Australian wine exports to increase by 9pc in 2015–16 to just under $2.17 billion, reflecting a 13pc rise in average unit export value more than offsetting a 3pc decline in export volume.

"In 2016–17 wine exports are forecast to grow by a further 2pc to $2.22 billion. Continued growth in exports to China and Hong Kong - although at a slower rate than in recent years - and a slow recovery in demand from the more traditional markets of the United States and the United Kingdom and other EU countries are expected to support small increases in volume and unit export value," the report said.

The WID said the rise in wine exports was led in terms of volume by Accolade Wines which was boosted significantly by its acquisition of Grant Burge Wines.

Treasury Wine Estate remains on top of the list for value of wine exports.

In addition to Accolade Wines acquisition of Grant Burge Wines, Peter Lehmann Wines sale in late 2014 to Casella Family Brands contributed to industry consolidation.

Accolade remains comfortably on top of the list of Australia’s largest wine companies in terms of winegrape intake.

The 610‐page WID includes a listing of wine producers, grapegrowers, suppliers, distributors, retailers, universities, research and education facilities, writers, wine publications, wine blogs, organisations, events and wine shows and industry personnel ‐ updated annually.


Ashley Walmsley

is the editor of Good Fruit and Vegetables.


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