Saturday, July 3, 2010

Too much or too little wine?

My article in this weekend’s Australian turns on Dr Richard Smart’s interesting – if not downright quixotic – look at the level of Australia’s wine production, suggesting the surplus problem is not due to surplus vineyards/grape harvests, but underselling. He argues that if Australia had retained its 2008/2009 market share we would need 2.6 billion litres to satisfy demand.

In Tony Keys’ KROW Report No. 28 (22 June) he makes the interesting observation that the 2010 production of 1.56 million tonnes, equivalent to 1.07 billion litres is slightly under annual sales of 1.1 to 1.2 billion litres. All well and good, he says, but how much overhand is there from 2009, and possibly before? That is indeed a question, but (given Keys’ eagle eyes and propensity for cold showers) there is another question: how much of the 1.1 to 1.2 billion litres has been sold with a profit margin, no matter how slender?

1 comment:

JM Darkly said...

Brilliant observation, thank you. Sure, it's fine to have the production but (like you say) what about the profit margin - esp pertinent with deep discounts in major markets. There can hardly be a profit.

What happens to the Murray in the meantime? The algae choking the already low water levels. Get rid of it and focus on quality rather than quantity... but then I guess you have to go to a marketer to OK...

The Australian wine industry looks like a bargain! I'm sure Bright Foods would agree.

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