Business

Wine in decline

JEREMY COLE

Australian wine producers are experiencing their worst period in two decades, but the WA industry is slowly improving according to new sales figures released yesterday.

The Australian Bureau of Statistics figures reveal a total sales decline of 2.4 per cent last financial year which is the first decline in annual sales on record.

It is also the fourth straight quarter that domestic wine sales have declined – the longest period of market weakness in 15 years.

However, the news is not all bad with Winemakers Federation of Australia Communications Manager Nick Carr predicting the tough times are almost over.

“It’s been a fairly tough time for the wine industry with domestic and export sales down and with greater competition overseas, but what we are seeing is a move towards premium quality wine which we think is one of the strengths of Western Australia wine,” Mr Carr said.

The drop in overall sales can be attributed to a global oversupply of wine and the high Australian dollar, allowing international wines to sell at highly competitive prices.

Mr Carr said this put extra pressure on local producers.

“We have to put the wine out there at cheaper prices, which diminishes our return and reputation, so a lot of what we’re trying to do is getting people to focus on the high level premium wines again rather than seeing us as a producer of low-cost wine,” he said.

The volume of imports is on the decline, dropping 5.1 per cent in the June quarter, compared to the same time last year.

Imports accounted for 14.8 per cent of total wine sales at the start of this year, dropping to 12.8 per cent over the next three months in the June quarter.

However, the amount of imports still remains double the level of five years ago.

Mr Carr said the overall drop in sales was an added element of the weak economy with consumers being more cautious with their money.

“If things are a bit tight, people are buying less,” he said.

“We are looking at different ways to make wine more appealing for consumers to buy, and we think Australian wine is as good as any.”

Listen to Jeremy Cole’s interview with Nick Carr.

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