Outlook for wine and wine grapes

Dr. Caroline Gunning-Trant

Economist

ABARE

Industry observations

• low prices

• cancellation / non-renewal of contracts

• Wine Restructure Action Agenda (WRAA)

Export Dependence1998-99 2008-09

Exports64%

Exports38%

Domestic62%

Domestic36%

Total sales: 564 million litres Total sales: 1,180 million litres

Major Export Markets

100

200

300

USA UK Canada Other

2007-08

2008-09

MillionLitres

Bulk

Exports by price category

200

400

600

800

2000-01 2004-05 2008-09

Million Litres

Basic (≤$2.49)

Popular Premium($2.50-$4.99)

Premium ($5.00-$7.49)

Super Premium($7.50-$9.99)

Speciality(≥$10.00)

62%

76%

85%

Australian Wine Exports

1000

2000

3000

4000

2000-01 2002-03 2004-05 2006-07 2008-09 2010-11 2012-13 2014-15

Millions$ and L

1

2

3

4

5

6

7

2009-10

$/L

Volume

Value

Unit value

200

400

600

800

2002-03 2005-06 2008-09 2011-12 2014-15

Million Litres

15

20

25

L/person

Domestic Wine Consumption

Domestic

Litres per person

Imports

AssumptionsTHIS VINTAGE:• heat wave in November • reduced data availability from ABS

- sample only

- only 10 major varieties

- multipurpose grapes excluded

• no assumption about grubbings

FUTURE VINTAGES• average yields• no extreme weather events• national bearing area to decline from 2013-14

600

1200

1800

2400

2002-03 2004-05 2006-07 2008-09 2010-11 2012-13 2014-15

'000

tonnes

300

600

900

1200

2009-10

$/tonne

Production

Average value

Wine Grape Production

Summary

• continued decline of wine grape prices

• pressure on wine grape growers given price expectations

• speed and extent of industry restructure unknown

• world markets

End_title slide

100

200

300

400

500

600

2000-01 2002-03 2004-05 2006-07 2008-09

2009-10

Million $

Other

France

New Zealand

Australian wine imports