27/07/2015 - 13:56

Margaret River wine tanks

27/07/2015 - 13:56

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Margaret River has cemented its position among the least profitable of the nation's popular wine regions, with the latest figures showing half of its wine sold at a loss for the second year in a row.

Margaret River wine tanks
Margaret River wine region.

Margaret River has cemented its position among the least profitable of the nation's popular wine regions, with the latest figures showing half of its wine sold at a loss for the second year in a row.

According to a comprehensive report recently released by the Winemakers Federation of Australia, only one-third of 2014 and 2015 vintages produced in the Margaret River region was profitable (defined as selling for more than $300 per tonne above incurred costs).

Margaret River’s 2015 vintage sale price averages were very similar to 2014 results but were markedly lower than 2012, when profitable wine sales outpaced loss-making wine (43 per cent compared with 38 per cent).

According to the Winemakers Federation, Margaret River wine sales that achieved a low profit (defined as selling for between $100 and $300 profit per tonne) or breakeven price together accounted for 20 per cent of wines produced in the region for the 2015 vintage.

The nationwide report also found Tasmania has maintained its mantle as the most profitable wine region in Australia.

Producing only slightly more than smallest producer Queensland and with volumes accounting for less than half a per cent of the national total, the boutique region recorded the highest profits with 99 per cent of all 2015 Tasmanian vintages selling for more than $300 per tonne over incurred costs.

Other well performing Australian wine regions included Victoria's Mornington Peninsula (91 per cent profitable), and South Australia's Barossa (57 per cent profitable) and McLaren Vale (49 per cent profitable) regions.

Compared with these cool climate regions, warm inland wine areas across Australia such as the Riverina, Murray Darling-Swan Hill, Hunter Valley, Riverland, Mudgee, Langhorne Creek and other WA regions reported the worst profitability.

Sixty-one per cent of 2015 vintage wine sold from WA’s Great Southern Region sold at a loss, while almost all (98 per cent) of WA’s Swan District wine was also unprofitable.

There were some positive steps forward though with breakeven wine sold in the Great Southern Region increasing to 20 per cent in 2015 from 2 per cent in 2014, essentially reducing the amount of unprofitable wine sold.

The Swan region also increased its sale of profitable wines slightly from 0 per cent in 2014 to 2 per cent in 2015.

Together WA’s wines accounted for 2 per cent of total 2015 Australian vintages produced.

Across the country more than 1.5 million tonnes of grapes were crushed in 2015, slightly down on last year’s 1.7mt and 2013’s high of 1.8mt.

The top three red varieties by crush were shiraz, cabernet sauvignon and merlot.

Chardonnay remained the most popular white crush, followed by sauvignon blanc and pinot gris and pinot grigio.

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