There's bad news on the way for Australian wine drinkers - wine prices are tipped to rise over the coming years as demand for grapes outstrips supply.
There's bad news on the way for Australian wine drinkers - wine prices are tipped to rise over the coming years as demand for grapes outstrips supply.
Research into the Australian wine industry conducted by a leading global consultancy shows that the over-supply issues that have been a factor for some grape varieties in recent years are expected to be resolved shortly.
In their Wine Industry Market Report, researchers at the International Wine and Spirit Record found that grape shortages are likely to be a problem for the Australian wine industry in coming years.
"With the current low level of new plantings, the IWSR believes that Australia will not be able to supply anticipated demand by 2010. It is our view that the medium term problem for Australia is therefore more about shortages than oversupply," the report states.
The research, finalised in October 2005, shows that the global wine market had a retail value of US$86.13 billion (in excess of AUD $110 billion) in 2003.
"IWSR considers it reasonable to assume that the retail value of this market may grow to approximately US$100 billion (AUD $136 billion) by 2008."
IWSR's report on the outlook for the Australian wine industry states that based on current product and export levels, and the potential to penetrate further key emerging Asian markets, it is reasonable to assume that Australia and the USA will become the best performers of the socalled 'New World' wine producing nations over the next six years, with Australia taking an estimated 10 per cent share of the global international trade market by 2010.
"The IWSR also believes that, at the current level of new plantings, Australia will not be able to sustain that growth and will move into undersupply by 2010; a situation that might bring its own set of challenges in an increasingly competitive market," the report states.
"New plantings are below industry growth rates and at their all time low despite the fact that, in the medium term, more vines will be needed to support growth, both at export and domestic
levels."
In the IWSR's opinion, the bulk of any surplus of wine at a global level is primarily concentrated in the very inexpensive, virtually un-saleable wines and the barely or non-profitable wines.
"This certainly always attracts media attention and stretches storage capacities, but often little else. For better quality wines, any surplus is usually absorbed quite quickly by on-going growth and trading up by non-producing or part-producing countries."
