Crash tipped to put squeeze on WA’s top winemakers

WA winemakers were facing the end of the boom times with the global credit crunch likely to create uncertain” demand for top-quality wines, an industry expert said yesterday.
 
A little more than a year ago the State’s wine industry was optimistic as consumers were happy to splash cash on expensive wines and a smaller 2007 national grape harvest pushed up prices.
 
But the 2008 grape crush was 1831 tonnes — about 400 tonnes more than for 2007 — which has put downward pressure on prices just as the economic downturn made wine lovers less extravagant.
 
Australian Wine and Brandy Corporation analysis manager Lawrie Stanford is set to tell today’s ANZ WA Wine Industry Outlook Conference that challenging times are ahead.
 
Consumers were likely to turn to cheaper wines and this could hurt WA winemakers, he said.
 
“That will be unfortunate for WA … because WA is a premium wine producing area of Australia and unfortunately it will be the higher price points which will suffer,” he said.
 
Mr Stanford said wine supply in Australia continued to increase while the industry needed to become smaller and focus on quality to remain viable.
 
WA Wine Industry president John Griffiths agreed wineries were under significant pressure
 
“We’re also seeing an increase of imported wines into Australia and this is affecting the domestic situation and, as a result of that, we’re all under a lot of pressure,” he said.
 
“But the flip side is there remains a lot of opportunity in the wine industry for those people who have the skills, those people who have the quality and resources to continue to developed their business.”
 
Mr Stanford said some vignerons were already removing grape vines in a bid to reduce grape oversupply.
 
“People are getting the message the industry needs to be smaller and more select,” he said.
 
“We’re headed in the right direction, albeit the next few years are going to be tough.”
 
Margaret River Wine Association president Leah Clearwater said the local wineries were fortunate that their focus was already on quality wines rather than high production.
 
“If you are going to buy a premium wine, you are going to turn to a region like Margaret River and I think that demand will remain,” she said.